Challenges Facing Remote Irish Buyers
Near the top of the list of things to do for most people moving to (or back to) Ireland is finding a home. Many are happy to rent while getting their feet on the ground, while other's want to immediately jump in and buy a home. I get numerous requests from people looking for information on this subject. Houses, mortgages, locations, etc. I am by no means an expert in this field, but there is plenty of experienced help out there if you need it.
I reached out to Carol Tallon, a property buyers advocate, and author of the Irish Property Buyers Handbooks, to see if she would be interested in sharing some of her expertise with us. Carol has kindly offered to share some of her insight into the challenges facing remote Irish property buyers. Over to Carol...
Writing as The Buyers' Coach
There is a new type of buyer in the marketplace at the moment; property reports simply refer to them as overseas buyers, while industry media might loosely refer to them as returning ex-pats. Neither description is accurate for the majority of these buyers. 'Remote buyers' is a more accurate description with this mobile generation.
Typically the buyers are Irish (or one half of the buyer couple is Irish), living abroad for a relatively short number of years (perhaps five or six) and have amassed savings in excess of €50,000 plus. In my experience, contrary to much of the media reporting, these buyers are not planning to return home in the immediate future, but rather, they are looking to safeguard their futures.
They have large sums of cash and unlike the previous generation, they understand that cash on hand is actually a depreciating asset (and in some instances can be a liability). They know the smart thing to do is invest. Most will look into other investment options but inevitably come back around to the notion of investing in property.
Admittedly, I am biased, having expertise only in property as an investment so this blog post is only for those buyers, who have discounted other vehicles of investment (although please do share your experience of alternative forms of investment with the group as property is not for everyone!).
So, when the decision is made to invest in property, most would-be buyers might consider the following options:
- A home in the country they are currently living in
- An investment property in the country they are currently living in
- An investment property in Ireland
- A property in Ireland that can function as in investment until the decision to return is made, at which point they want the property to function as their home.
Interestingly, even ex-pats not intending to return to Ireland to live, will generally still choose Ireland as their investing base. Over the course of the crash and subsequent recovery (still ongoing), there were times when this felt a little like Stockholm Syndrome. ..
Option number four above is the most commonly sought one but it is rarely the best option for remote buyers. There are a few reasons for this but principally, what makes a good investment property does not make a good family home, and vice versa. Buyers trying to achieve this generally end up with a below par investment (below 5%) and a home that they would not like to live in - or in an area they would not like to live in - for any prolonged period of time. A far superior option is to look for the best possible investment property, that gives a good mix of annual return with the potential for capital appreciation . This will invest the capital sum, create an income, and most importantly, it effectively hedges for inflation in the property market over the longer term i.e. when the time comes to return to Ireland (or if you decide never to return permanently but would like a more salubrious holiday base for seasonal visits!), your existing property will have benefited for the market inflation over that period. Of course, as we all know, the market moves in more than one direction and, without the aid of a crystal ball, the best that buyers can do is research the area, the building and the likelihood of attracting tenants.
Particular challenges facing remote buyers, particularly in Dublin, is that their bids are not taken seriously until they have someone acting for them on the ground. This is something that BuyersBrokerInternational.com offers but it is also something that family will sometimes oblige with. As a general rule, estate agents will not accept an offer from a remote bidder, based only on photos etc. This is quite backwards. The technology exists to facilitate remote viewings (periscope, video etc) and in some cases this is being used but when it comes time to make an offer, the estate agent will opt to deal with the person who can establish trust and credibility, unfortunately the simple fact remains that this is more difficult for remote buyers.
Ways to overcome this involve getting to know a few local estate agents (on home visits or via Skype), engage a professional house-hunter or buyers broker, enlist the help of a family member for viewings and to make offers on your behalf or fly home regularly (that last one will suit buyers in many European countries but is of little use to intending buyers further afield).
Carol Tallon, Property Columnist and Author of the Irish Property Buyers Handbook annuals 2011 to 2015, can be contacted on Carol@CarolTallon.com