Property Links

Specialist company will buy and let for you

Buy-to-let Investments: There has been a substantial increase in the number of private investors buying-to-let houses and apartments abroad, according to companies specialising in overseas markets.

The change in strategy has been prompted by the significantly lower prices being sought for new homes, mainly in Eastern Europe, and the promise of capital appreciation and yields of at least 5 per cent.

Other investors are happier to concentrate on the UK market where good returns are still available in many parts of London and the provinces. Even more investors are sticking to the Dublin rental market despite the over-supply in some areas and reports of lower rent levels.

Whatever view is taken of any of these markets - and the prospects for mortgage rates - the queue for investment opportunities abroad has never been longer. It is now one of the fastest growing sectors of the property market.

The Limerick-based company LPS Direct, which specialises in buying and managing apartments for investors, is one of the companies that has seen its business grow rapidly since it was set up six years ago.

It now manages more than 150 apartments in Ireland and the UK for Irish investors and, according to its founder, Michael O'Dwyer, it could treble its client base if it could find a sufficient number of top class properties.

The company plans to acquire another 200 apartments over the next two years in London, Bristol, Liverpool and Newcastle and will also be looking at investment opportunities in Prague, Bratislava and Warsaw.

LPS Direct claims to be achieving annual yields of about 8 per cent for its clients and, more significantly, points out that many of the apartments have shown a capital appreciation of about 200 per cent over six years. With about 80 Dublin apartments in its investment portfolio, LPS Direct says the returns here have been equally good. However, it has no immediate plans to acquire further investments in Dublin. Mr O'Dwyer says that while Dublin rents have slipped, the company's investors had not been affected because of "the high quality of our letting service and the high standard of the units".

The company operates a full-time management and letting service in London where it specialises in the corporate market. It has established close links with many leading companies including Credit Suisse, solicitors Clifford Chance and Morgan Stanley.

LPS is a major investor in New Providence Wharf, the huge apartment and hotel complex in the London docklands now being completed by Ballymore Properties. LPS bought 120 of the apartments for its Irish investors. It also manages apartments in several other Ballymore developments in London including St John's in Westminster, Aldgate Triangle and Millennium Harbour. The company "bulk buys" apartments in advance at a preferential price, arranges finance for its clients and subsequently organises fit- out and letting.

Equally interesting is that LPS normally recommends that investors should take out interest-only mortgages on the newly acquired properties. "A key element of our strategy is to offer investors interest-only mortgages because this gives them an immediate cash flow and allows them to build up a nest egg in the event of a void period," says Mr O'Dwyer.

LPS played host to 300 of its investors last week when it held a reception in its "trophy property" - a stunning penthouse in New Providence Wharf which has just been let at £1,500 per week. It has a floor area of 185 sq m (2,000 sq ft) and the roof garden of 278 sq m (3,000 sq ft) includes a private swimming pool and a sauna.