Breakthrough 25-year, government-backed, fully repairing leases - index-linked to European inflation - are now on stream for privately owned social housing units from Clonee to Dún Laoghaire. Net yields after costs are around 5.5% p.a., which is five times the return from the bond market. This is hugely significant for retirement income and estate planning.
There is no requirement to deal with tenants, as local councils (or housing agencies) are your lessees. This is a hands-off situation with no risk of vacancies or the usual tasks associated with managing property lets. The cash comes directly from local government into your bank account, there is no intermediary.
Build a portfolio of approved social housing units, houses, and apartments that will be rubber stamped by local councils and housing agencies for long-term leases. Sleep peacefully without worrying about stock markets! Your obligations stop at buildings insurance and, if applicable, Local Property Tax.
Average yields of 5.5% pa - that’s five times more than lending money to the Government through the Bond market.
No vacancy risk, no advertising, no calls from tenants.
Monthly rent payments arrive into your bank account like clockwork.
Ideal for Retirement Funds (SARTs, ARFs, PRBs) because of the security of long-term yields and safety of the asset class.
Rent reviews every three to four years linked to between 80% and 85% of private sector rents.
Even though the leases are created and signed by local government bodies, be clear that direct investment in property is not an asset class regulated by The Central Bank of Ireland and is not covered by the Investor Compensation Scheme or by the Financial Services Ombudsman Scheme.
A detailed analysis of this new market can be found on our blog: Social housing as an investment
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