The Irish Times revealed a lucrative strategy earlier today utilised by investors to profit hugely off former bedsits.
In 2013 small, single-room bedsits commonly found in victorian homes were outlawed. However, investors and wealthy international funds have been buying up these homes that contain small apartments and bedsits. They’d then refurbish and convert them into “studio apartments” that adhere to Irish rental laws. Subsequently they’d increase rental prices, often doubling the rates before selling them on.
This approach provided a loophole for landlords to avoid the 4 per cent cap on rents in rent pressure zones before regulations were tightened in June of last year.
The Times reported that in just three years one such consortium is estimated to have made around €20 million using this approach.
One shocking comparison made in the report from The Times stated, “While a typical size for a refurbished bedsit appears to be in the region of 29 sq m, The Times has observed adverts for studios as small as 12 sq m, less than the 17 sq m normally allocated to a disabled car parking space.”
Having focused on Grove Park in Rathmines, The Times discovered that the bedsits or “studio apartments” were rented out for between €1,000 and €1,300 per month. With their sources confirming that they had been previously rented for between €500 and €600 a month just two years ago.
They noted that out of the Grove Park studios that listed the size of the rooms the biggest was 21 sq m while 12 sq m was the smallest.
One ‘studio apartment’ viewed by The Times
An undercover Times reporter was given a tour of another similar apartment in Portobello.
He said that, “it was impossible to fully open the door to the bathroom as it would hit the end of the bed. The room, which was 13 sq m, was being advertised for €1,300 a month.”
The adverts for such properties are tailored to young professionals with a high level of disposable income and wealthy workers from abroad.
These revelations come in the face of a report published just yesterday by property site Daft.ie. They’d noted that despite the difference only being a tiny 0.1 per cent, that national rents had fallen for the first time since 2012.
Click here for the full Irish Times article.
Photo Credit: The Irish Times & myhome.ie