Renting can be difficult, so here are some tips to help you.
Why landlords in Dublin are choosing short term renting over long term
The short term letting market has exploaded over the last few years with more and more property owners opting for short term letting over long term letting. I think this is due to some important factors at play which has enabled this market to flourish.
Key conditions to exploding short term market.
1. Lack of supply of quality hotel rooms in Dublin
2. Ireland expects its biggest influx of tourists in 2017
3. Rent caps on long term rentals in Dublin mean some landlords cant make the rental market returns
4. Low barrier to entry with no regulation, owners need only signup to Airbnb and away they go.
5. The impact of the sharing economy has helped pave the way for landlords to do it themselves.
6. The rental returns can be double or treble the long term letting market rent.
With Airbnb listing 3600 properties listed in Dublin which is up 2000 properties since 2016 it is easy to see that a lot of landlords have caught onto the trend of renting their properties out to tourists, corporate guests or short term visitors.
There has been some big headlines in the Irish news over the last 12 months about the impact the Airbnb host sharing website has impacted the rental market in Dublin.
For me a headline article by the independent.ie let the cat out of the bag and alerted so many landlords onto the Airbnb marketplace.
The article mentioned how a couple achieved €79,000 in 1 year from renting out their apartment on airbnb and had it listed on daft.ie for €400,000 when other similar apts where going for €270,000
Below I am outlining a few reasons landlords may prefer the short term option over the long term tenancies
New rent controls introduced in December 2016 in Dublin
The stratedgy for the rental sector introduced a rent predictability measure, to cap rent increase by 4% per year for the next 3 years and rolled it out in Dublin in December 2016 meaning landlords couldnt raise the rent by more than 4% per annum.
If you where a landlord who was giving back keys to your 3 bedroom house in Drumcondra and you had a prior agreement with exiting tenants paying you €1400 per month then this €1400 is the base rent for your next long term letting meaning you can let it out for €1456.
If it was your first letting of your 3 bed house in Drumcondra then you could achieve the market rent of €2000+ per month. This has left a lot of landlords frustrated and naturally looking for alternatives.
No rules governing the renting of short term properties in place yet.
As it stands there is no rules governing the renting of short term properties in Ireland implemented by the Irish Government and with this low barrier to entry it is easy to see how landlords are attracted to short term lettings.
In the London property owners can only list on airbnb for 90 days per calendar year unless they submit an exemption form which lifts the ban.
Berlin has also a ban on airbnb short term lettings on people who let 50% of their apartments without a permit will receive a fine of €100,000.
There has been rumblings in the Irish press that the government will do something to control short term lettings but nothing has come to fruition.
The sharing economy has changed the game with Airbnb leading the way.
Airbnb, Uber, Shopify, Weworks to name a few companies who have helped change the way people go about their business.
Airbnb is notably the biggest name in the sharing economy and has enabled ordinary people make extra money renting out a spare room in their home.
People have become more comfortable with sharing now if there is some trust mechanisms in place like a review system in place to help protect them.
So since 2008 Airbnb have been operating and what we have is people have been used to renting apartments instead of hotels and they clearly like that experience of having their own space for their stay.
Tourism is through the roof with 10.8 million visitors coming to Ireland in 2017.
in 2016 9.5 million tourists visited Ireland and in 2017 Failte Ireland expects Ireland to receive over 10.8 million visitors and a lot of there visitors coming from places like, canada, USA and European countries who are well used to renting short term apartments vs Hotels.
The tourist industry needs short term lettings to help keep accommodation costs down for tourists visiting Dublin.
I think part of the reason the Irish government didn’t implement any airbnb controls is there was not enough hotel rooms in Dublin to satisfy the exploding tourist trade coming in.
Short term letting returns vs Long term lettings
The returns can be 2 to 3 times market rent in some months and who wouldnt want a piece of that pie.
Landlords are always victimised as been greedy but I was around when the market hit rock bottom in 2009 for most landlords who couldnt afford to keep their properties because the rents dropped so low.
Tenants where calling us leaving apartments left right and center because other places where 100 – 200 cheaper.
Now the shoe is on the other foot but some landlords cant make the returns because their property is governed by the PRTB rent caps so they are making hay for 6-7 months in the high tourist season and who can blame them.
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