Buy-to-let investors in Letterkenny are experiencing some of the best rental yields on record for the area.
Rental returns for investors who own property in the town and its environs have never been greater.
The demand for rental property is being driven by a lack of supply of new housing stock in the area, resulting from the almost total building blackout experienced since around 2008.
Those who are now in a position to buy-to-let are taking advantage of the lower house prices and higher rental returns.
It does not look likely that rental yields will be affected by any increase in housing supply around Letterkenny any time soon.
Although lenders are currently granting more mortgages to property buyers, who meet their criteria, developers are still struggling to secure finance for their future developments. That lack of lending for development projects leaves most ambitious developers unable to get their plans off the ground.
The result is that house prices have increased which is good news for vendors hoping to move up the property ladder. It is also great news for buy-to-let investors who have enjoyed dramatic rises in rental returns and those hoping to get into the local rental market at a time when rental yields are high.
According to the Q4 Rental Price Report by Daft, Donegal rental returns rose by 11.5% when compared to same period in 2015. The report states that rents nationally were “rising at the fastest rate on record” in Q4.
The report further explains that the rise was the “biggest 12-month increase” in a series [of Daft reports] that extends back to 2002.
The increased rental returns have sparked a surge of interest by investors in buy-to-let property across Donegal, particularly in Letterkenny.
Letting agents in the town are reporting that four-bed semi-detached homes in good condition are renting for around €750 to €800 or even more per month. Those figures compare to rental returns of between €390-€400 per month for similar properties just a couple of years ago.
Three bedroom semi-detached houses in need of some capital expenditure are currently selling in Letterkenny for around €100,000 and an increasing number of buy-to-let investors are now seeing great opportunity for high rental returns.
For more information on buy-to-let in Letterkenny or investment property in Donegal please get in touch today.