WORTH THE INVESTMENT?

 

Address:A1, Isolde's Tower, Parliament Street, Temple Bar, Dublin 2.

Agent:Gunne.

Property:two-bedroom first floor apartment with an asking price of €425,000.

Landscape:in the west end of Temple Bar, this apartment has great views across the River Liffey and is close to all the city centre hot spots.

Features:the 60sq m (655sq ft) apartment comes to the market in good condition. It is one of three apartments off a lobby on the first floor. It has an open-plan living space and two bedrooms. Ceilings are higher than average.

How much for an investor?Stamp duty at 7.5 per cent and legal fees of 0.5 per cent plus Vat will add up to an acquisition cost of €459,446. An investor requiring a 90 per cent mortgage over 20 years could opt for a PTSB tracker mortgage at a rate of 4.9 per cent. The annual repayments would be €30,039 and €18,743 on an interest-only mortgage.

How much for a residential buyer?A residential buyer on a 92 per cent mortgage at a discounted tracker rate of 4.1 per cent would pay €28,680 a year in mortgage repayments or €16,031 on an interest-only rate.

Potential:it should fetch a rent of around €1,450 a month, according to the agent. This translates to a rental income of €14,500 (allowing for being empty for one month a year and for one month costs).

Verdict:on the above figures investors could expect a yield of 3.4 per cent. The annual shortfall on an annuity mortgage would work out at around €15,500 and just over €4,000 on an interest-only mortgage. The apartment's strong rental location, however, makes it more attractive.

Calculations by Simply Mortgages