Worth the investment?

Address: 30 St Fintan's Villas, off Deansgrange Road, Blackrock, Co Dublin.

Agent: Singleton & Associates.

Property: site of 0.1 of an acre with its own access, but without planning permission, for €250,000.

The landscape: situated in an estate of former local authority houses with huge gardens. This site is behind a house but has separate access.

A house built on the site, subject to planning permission, would still have a reasonable garden, says the agent. He says the owners didn't go for planning permission because they want a quick sale.

How much for an investor? For the purpose of the exercise we have assumed the buyer will build a 116sq m (1,250sq ft) no frills detached house on the site at a cost of €300,000.

With stamp duty on the site at 9 per cent and legal fees at 0.5 per cent, and if you add the cost of construction, the acquisition cost would be €574,013.

An investor borrowing 90 per cent of this over 20 years at a PTSB tracker rate of 3.35 per cent would have an annual repayment of €33,994. On an interest-only mortgage the repayments would be €16,583. An investor with a 50 per cent mortgage over 20 years at a tracker rate of 3.35 per cent would have annual repayments of €18,885 and €9,213 on an interest-only mortgage.

How much to buy? A residential buyer with an 80 per cent mortgage at a PTSB tracker rate of 3.35 per cent would have an annual repayment of €31,536 - on an interest-only mortgage the repayment would be €15,384.

Potential? The site would fit a house of around 116sq m (1,250sq ft).

Verdict: risky without planning permission but, given a precedent in the area for similar development, it might be a risk worth taking.