My boyfriend is planning on joining me from the UK in Dublin in the next six months. The idea was to rent and save for a property, however renting in Dublin while trying to save just doesn't seem like an option.
We've heard buying can be "cheaper" than renting today, we were thinking that an apartment could be a more affordable stepping stone to buying a family home down the line, but we're worried about unexpected management costs. Many of them don't seem to say online what the annual fees are. I'm wondering what we could expect to pay? What do the costs cover? Do costs vary city to city? We were also looking into Limerick as an alternative to Dublin.
Rents have risen considerably in Ireland in recent years due to the ongoing shortage of housing supply. This makes it extremely difficult for people to both rent and save to buy a property.
In your case, you feel you may be able to purchase an apartment now and a house later. In passing, I would note that many people in other European countries live long term in apartments. However, in Ireland, developers to date have generally not built family-friendly apartments. Many families have ended up living in apartments but a lack of three-bed apartments, storage space, play areas and so on make many Irish apartments unsuitable for families.
In terms of the annual service charges payable to the owners’ management company (OMC) that applies to the common areas of the development, estate agents are under no obligation to display these but normally they would provide this information if you ask. If you are actively interested in an apartment, you could ask the agent to ask the OMC in question (normally via their managing agent) for a copy of the current year’s OMC budget and a breakdown of service charges. This will provide you with information both on the charges and on what services the property owners receive for these charges.
There is not a “standard” apartment service charge as each development is different. For example, some developments have lifts and others don’t; some have an underground car park to manage and others don’t; some have extensive grounds and others don’t; and the types of roofs on developments can vary considerably also. Each OMC will consider its specific requirements in setting its budget.
Sinking fund
Also, a responsible OMC should be putting aside funds each year into a sinking fund for longer-term investment projects. Thus, a higher charge can in some cases be a sign of a responsible and prudent OMC and a low charge may simply reflect an OMC that is not thinking about the longer term. In fact, as well as asking about the current year’s service charge, it would also be worth finding out about the size of the OMC’s sinking fund, especially if the development is already more than 10 years old.
Some standard matters covered by the service charge include: insurance for the building (not including contents of your apartment); refuse collection; electricity to the common areas; lift maintenance; maintenance of fire-safety systems; cleaning of the common areas; grounds maintenance; CCTV and security; repairs and maintenance; costs relating to the good management of the OMC (eg audited accounts); and professional fees for a licensed managing agent.
Note that some (although not all) of the services you receive for your service charge would be required in any event if you lived in a regular house, outside of an OMC structure. And you would have to organise all of these jobs yourself!
As regards regional variations, there may be some variation but not a huge amount. Many of the costs won’t vary much as between Dublin and Limerick. Others, such as the cost of call-outs for contractors, may see some variation. So, while the initial cost of purchasing is likely to be lower in a regional location as compared to Dublin, the annual service charge may not vary so much. This is also true within Dublin. Apartments that cost less to buy do not automatically have lower service charges – in some cases, if the cheaper initial cost was due to cheaper materials being used in building the apartments, maintenance costs may even be higher over time.
Finbar McDonnell, is a chartered property manager and member of the Society of Chartered Surveyors Ireland, scsi.ie
