Hundreds of people are taking quick courses on how to invest in property. Edel Morgan asks what can you learn
Can you learn how to become a property investor in eight weeks in a classroom environment or is it a fly-by-the-seat-of-your-pants profession that requires gut instinct, a willingness to take risks and an eye for the main chance to be successful?
An estimated 700 to 800 people in this country have gone back to college in recent years to learn the tricks of the trade in night classes in UCD and UL which are strategically named after popular Channel 4 TV programmes, Property Ladder and Location, Location, Location. The course director of both, Mary Fitzgerald, is moving to a new venue this year, Portobello College, because its main lecture theatre has a bigger capacity - of 450 - to cope with the anticipated demand. The 16 lecturers include a number of property speculators who've built up bulging portfolios.
While many Irish investors seem to have survived quite well without formal training, they've had the helpful backing of a rising market for the last decade. The investors who, pre-property boom, bought land and buildings in areas no one else would touch - areas that have since been redeveloped and have soared in value - are the ones with the kind of foresight that probably can't be taught. For the rest of us, however, it's probably no harm to learn the basics before taking the plunge. A successful investor I spoke to admitted that such a course might have saved him making some "naive mistakes" early on. I recently heard that a high profile Dublin developer believes property acquisition should be part of the school curriculum. You can picture the scene: "Today boys and girls, we will learn how to duck and dive."
With Irish opportunities drying up, and the future of the market uncertain, investors are having to get creative and look elsewhere to invest. Fitzgerald agrees it's not possible to learn every aspect of being a property investor in eight weeks "but it makes you better equipped to make the right decisions. Many people go to property exhibitions and are bamboozled by jargon and sales talk. After the course they're better able to read between the lines and ask the right questions."
She tells the story of a Limerick housewife who was thinking of buying an investment property for her kids going to college but who switched tack - rather radically - after the course and bought two shops in Bulgaria instead "because she found there can be a better return on commercial property".
The course covers sourcing capital and how to use your SSIA money to fund an overseas investment property. It also looks at hidden costs and taxation issues and about being aware that there may be an "Irish price" that's different to the local price.
She says the classes attract an equal number of men and women, the most prominent age group being mid-30s to 50s. Previous attendees have also included "the latest phenomenon", first-time buyers who can't afford to buy here and are looking to buy abroad.
One of the most valuable segments of the course is about how to manage tenants. It's not all about the thrill of the acquisition; being able to negotiate the minefield of being a landlord is so important it merits a course of its own. Many Irish investors are ignorant of the requirements of the Residential Tenancies Act 2004 and that they must register with the Private Residential Tenancies Board (PRTB).
It's important to know a landlord's obligations to the tenant. For example, a property owner can be fined by the tenancies board if they don't respond promptly to reasonable requests to repair items or maintain the property or if they fail to act on neighbours' reports that their tenants are engaging in anti-social behaviour. The property should meet the requirements of the 1993 Act on rented housing standards with common areas kept clean and appliances, boilers and fire alarms serviced regularly.
Margaret McCormick of the Irish Property Owners Association (IPOA) advises landlords to cover themselves by getting tenants to sign a sheet every three months to confirm everything in the property is satisfactory - although for some this could be too intrusive. Getting rid of a bad tenant can be "very stressful" she says. If they refuse to leave after serving the appropriate notice, you can refer the matter to the PRTB for mediation or adjudication. But the process is slow, with the PRTB being "severely understaffed".
For those buying abroad, solicitor Roddy Tyrrell says a good guide book with a synopsis on local laws and bureaucracy is essential, as is hiring a good independent solicitor who speaks English. He recommends getting a management company to look after a property, but says you should be aware that some charge 15-20 per cent of rental return. A management company won't absolve you completely from an involvement in the property, though, if something goes wrong. "In many countries long-term tenants acquire certain rights which make them harder to remove. You won't have that problem with short-term lets but then you might not be able to rent the property outside high season."
• Property Ladder starts September 26th at Portobello College and costs €180.
