If you’re a young professional starting to earn good money, surfing the waves of houseshares in Ireland’s precarious rental market can start to get old. Tired of the circus of utility bill-splitting and cleaning rotas with an ever-changing cast of housemates, some will pay a premium for what seems like a more stable set-up.
Developers of build-to-rent apartments are selling just that. Tenants may spend hundreds more of their take-home pay on rent, but they are paying for professionally-managed housing and a seemingly friction-free life.
So what are the pros and cons, and the costs of build-to-rent accommodation?
What is build-to-rent?
An on-site concierge, a games room, what about a yoga studio or a dog spa? What’s on offer at some build-to-rent developments couldn’t be more different from a traditional apartment rental or house-share.
Much building in Ireland in recent years has been by developers of units for the private residential sector. The sector had been responsible for 5,000 new homes in both 2022 and 2023, mostly apartments in Dublin, according to analysis by property agent Savills.
These developments are often owned by pension funds and other institutional investors who build or buy at scale. They cherry-pick locations near work and transport hubs, and target higher earners in their marketing. All but a small number of units in such schemes must be set aside for social housing, this is rarely mentioned in marketing materials.
As most schemes are new, rents there are not as hamstrung by the caps introduced in 2016, which have constrained prices in other rental accommodation. If you live in a build-to-rent development, expect a professionally-managed experience, but at a cost.
How much?
There can be well more than €1,000 in the difference between renting an apartment in a build-to-rent development compared with renting a similar-sized unit nearby owned by a different type of landlord.
Rent from a build-to-rent landlord and you’re referred to as a “resident”, not a “tenant” – and that’s a whole other philosophy and price point.
Some build-to-rent developments are overt in signalling they want applicants from higher income brackets. Would-be tenants of Brickfield Square in Crumlin, launched by global real estate company Greystar in September, are invited to use an online calculator to “estimate the monthly rent your household can afford to pass referencing”.
[ Oscar Traynor affordable house sales open in Dublin with prices from €254,358Opens in new window ]
Those with an income of €75,000 or under won’t have any luck. Those earning €80,000 can consider a one-bed 49sq m (524sq ft) apartment renting from €2,401 a month, according to the website. Two-bed, two-bath apartments rent are from €2,850.
The scheme offers a serviced reception, a courtyard garden and an on-site cafe. Residents will know the person exercising beside them in the on-site yoga studio is likely to be earning at least €80,000.
Choosing build-to-rent isn’t going to be your cheapest option. A two-bed, one-bath apartment for rent in nearby Fort Ostman, a development that is some 20 years old, is currently advertised at €2,100 a month.
Many renters of course don’t have options and must take whatever they can find.
Head into Silicon Docks, home to tech giants Salesforce, Meta and Google and build-to-rent developments proliferate. At Capital Dock Residence, a one-bed apartment measuring 55sq m (597sq ft) rents from between €2,520 and €3,000. Two-bed apartments range from €3,150 to €4,320.
You’ll find a cheaper 80sq m (860sq ft) two-bed for rent in the non-build-to-rent Millenium Tower in the area for €2,950.
Near Sandyford and Cherrywood, home to Microsoft and Dell, and a two-bed apartment at U Clayfarm outside the M50 on the Ballyogan Road starts at €2,400. The development has a residents’ lounge and concierge.
How much should you be spending on rent? Paying less than 35 per cent of monthly disposable income on basic accommodation costs is generally affordable for most households, according to the Housing Agency. The median amount all tenants spend on rent is 30 per cent of their monthly net income, after tax and excluding bills and services charges, according to an survey last year by the Residential Tenancies Board (RTB).
If your endgame is to save for a house deposit, spending on premium accommodation can slow things down. Of course, many renters just don’t have much choice.
What do you get?
Those living in a build-to-rent unit get more bells and whistles. Reception areas, co-working spaces, games rooms, yoga studios, parcel rooms are some of the amenities in each new development. Your rent is paying for these various communal spaces and amenities. Consider whether you could do without them for a cheaper rent – if you can find it.
These added extras are part of the definition of their proposition, according to an RTB rental sector research report published last year.
“These large landlords have a preference for well-remunerated professionals, such as those in tech, finance and healthcare,” the RTB notes.
It’s not just an apartment that is being marketed as much as a lifestyle, and even a social mix. Savvy marketing is essentially selling people to other people – attracting a certain type of tenant can be the selling point that attracts other similar tenants.
“They view their rental offering as more than just a property, emphasising the location and environmental context in their marketing,” according to an RTB report. The rent and the required income level stipulated by some developments will preclude many earners.
There can also be a “clustering” of tenants from the same country, and even the same company, says estate agent Owen Reilly.
“With build-to-rent, they tell their friends or work colleagues and you see a lot of Indians, French and Australians from companies like Google, Meta, Salesforce, Amazon – you see clustering. You will see them all sitting together in the business suite or residents’ lounge,” says Reilly.
Users of build-to-rent accommodation in the UK are predominantly in the 25-34 age group, according to a consumer trends report published this year by RightMove. It’s a similar age profile here, says Reilly.
The biggest drivers of happiness, according to 44,000 build-to-rent resident reviews tend to be more emotional than tangible, the RightMove report stated. “Being proud to live there”, “feeling a sense of belonging” and “earning enough to live comfortably”, ranked higher than recreational amenities and public transport.
Low maintenance?
Paying more rent for reliable maintenance will be worth it for some. Satisfaction with repairs ranked as important for build-to-renters in the Rightmove data.
When your oven is on the blink or the shower is running cold, some living in private rental accommodation, fearful of rocking the boat, can hesitate before hassling a small landlord with maintenance issues.
Build-to-rent scheme tenants are often provided with a resident app enabling them to log repairs on their phone. You’re unlikely to have to wait too long to get something fixed, or to have to stay home to let a tradesperson in.
[ What is behind the sharp fall in young people living with their parents?Opens in new window ]
Utility costs
Those renting a regular house or apartment will typically pay a monthly rent, including bin charges. Tenants arrange their own electricity, broadband and TV packages and can shop the market to find the best deals.
Those in build-to-rent tenancies may not have the same latitude. Tenants may be tied to a provider or a plan dictated by the development. For example, residents of Capital Dock Residence will pay energy, broadband and TV bills on top of their rent, however they are tied to Virgin Media as the broadband and TV provider, according to the development.
When choosing build-to-rent, interrogate how utilities are charged and whether you have an option to seek better value. It may be a priority for an institutional landlord to achieve a particular environmental target across its developments worldwide – a green tariff, however, may not be the cheapest tariff.
On the flipside, newer build-to-rent schemes are likely to be much more energy efficient than older, rental accommodation. You may use less energy, spend less on it and be warmer. Before committing to a lease, ask what the typical energy bills are for an apartment of your size.
Car parking
Many build-to-rent schemes are close to transport links. Not needing a car is a big saving and it’s obviously greener, too. If you do have a car, parking is likely to be limited and will be charged as an extra. At Capital Dock Residence, for example, a car parking space is charged at €100 a month.
Renting in a traditional development can come with a car space or two for tenants as well as visitor parking.
Pet privileges
Landlords who allow a pet are increasingly rare. Some build-to-rent developers actively welcome pets, albeit at a cost.
Node in Phibsborough charges €75 for pets “to ensure they have a comfortable stay too”.
At Capital Docks Residence, there is a once-off pet deposit that amounts to half the security deposit, which is half the first month’s rent.
Rent increases?
Wherever you rent, annual rent increases in rent pressure zones are capped in line with inflation or 2 per cent a year, whichever is lower.
Rent caps, however, are causing the supply of new rental properties from institutional investors to “fall away”, according to a report from estate agent Hooke & MacDonald. It is arguing for the 2 per cent cap to be removed.
With a drop of more than 20,000 tenancies in Ireland last year, according to the latest RTB figures, expect increasing pressure on supply and rents across all types of accommodation.
Rental tax credit
Wherever you rent, be sure to claim the rental tax credit. This is offered at a rate of 20 per cent of your annual rent. You can claim a maximum of €750 for an individual or €1,500 for a couple. Claim it through MyAccount on Revenue.ie.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
