WORTH THE INVESTMENT

Section 50 student apartments in Co Galway.

The address:Aras Ghuaire, Letterfrack, Co Galway.

The agent:Douglas Newman Good John Mannion.

The property:two-bed Section 50 student apartments priced at €259,000.

The landscape:Letterfrack village is home to Galway-Mayo Institute of Technology's furniture-making courses, which has 180 students during term time. The village is also a popular tourist base for exploring west Connemara - it's beside Connemara National Park and 8kms from Kylemore Abbey.

The features:the scheme has 19 two-bedroom apartments and one retail unit, a restaurant and an office unit. Apartments have around 65sq m (700sq ft) with one double room and one single. They have high gloss kitchens and walnut floors throughout and come fully furnished. The apartments are complete and some were rented to students in the 2008 academic year.

How much for an investor to buy?Stamp duty for investors will be will be €9,380. An investor could raise €207,200, representing 80 per cent of the purchase price. On a full-payment basis this would work out as €1,178 per month over 25 years and €818 per month interest-only. These figures are based on a one-year fixed rate of 4.74 per cent with First Active.

How much for a residential buyer?A first-time buyer could go for a 92 per cent mortgage of €238,280 at a rate of 4.74 per cent on a one-year fixed rate with First Active. Over 35 years this would mean repayments of €1,162 per month.

Potential:the two rooms in the apartments will, according to the agent, rent for €225 a week over the 38-week college term. Income during the remaining 14 weeks during the summer will range from €325 to €495 a week. These apartments qualify for 72 per cent tax relief, which means that owners can set this amount against all rental income.

Verdict:a rent of €225 per week for 38 weeks and €325 per week for 14 weeks would represent a yield of around 4.8 per cent (assuming 100 per cent occupancy).

Calculations by Simply Mortgages

- Fiona Tyrrell