Rental income can be a nice earner but it comes with some substantial risks especially in the current economic climate. When someone purchases a buy-to-let property they expect the rent from the property to exceed the costs and for the property to increase in value over time, but that is not always the case.
From 1993 to early 2007, property prices in Ireland showed a steady rise and in particular from 2001 to 2007, property tripled in value. This spurred additional building and despite over 15% of all homes being unoccupied, construction continued. A recent report showed that over 350,000 homes, representing 17% of Ireland’s total housing remained unoccupied. At its height, the average house in Ireland was worth €310,000 but thanks to the credit crunch this figure fell to €150,000.
In late 2012 property prices increased for the first time since 2007 but still remain over 60% lower than their peak. Given the slight increase in prices and a corresponding increase in the number of residential transactions, experts say that the market is in early stages of recovery.
If you own a property that you currently rent or are planning to rent, then landlord insurance is very important. Even if your property is unoccupied, landlord insurance is a must. Paddy Compare can help you take advantage of some of the best buy-to-let insurance deals on the Irish market. Simply fill in our short one page landlord quote form and start saving money when you need it most.