Worth the Investment?

The address: 368 Harold's Cross Road, Dublin 6.

The agent: Orchard Real Estate Alliance.

The property: pre-63 semi-detached house divided into nine self-contained units for €2.2 million.

The features: this 298sq m (3,208sq ft) house is divided into nine units - six bedsits, two one-bed flats and one two-bed flat, and has a double garage. The agent says the property need refurbishment to compete in the current rental market.

How much for an investor? The acquisition cost, including stamp duty at 9 per cent and legal fees at 0.5 per cent, is €2,411,310. The annual repayments on a 90 per cent mortgage over 20 years at a PTSB 1.1 per cent tracker rate of 4.1 per cent would be €145,236 (€12,103 per month). The annual shortfall on the rental income, calculated at €55,000 when one month's costs and one month's void is taken into account, would be €90,236. On an interest-only mortgage the annual repayments would be €81,180, leaving a shortfall of €26,180. To break even on the rental income an investor could take out a 35 per cent mortgage over 20 years at an AIB tracker rate of 3.95 per cent.

Potential: while the agent wouldn't commit to rental figures, in its current condition we estimate it would attract rent of €5,000-€6,000 a month. However, this would rise considerably if the property was refurbished.

Verdict: capital allowances are available for pre-63 properties where refurbishment is necessary and the costs can be offset against rental income. On the downside, multi-unit properties need a lot of management and many of them are protected structures which can make renovations a headache. The agent believes it may be bought by a residential buyer who would convert it to a family home.

Calculations by Simply Mortgages