WORTH THE INVESTMENT?

Address: 12 Arran Quay Apartments, Dublin 7, Agent: Young. Apartment type: Two-bed apartment at €265,000.

What do you get? Around 60 sq m (645 sq ft) of living space in a south-facing two-bed apartment with its own door. Accommodation comprises a livingroom, standard galley-style kitchen, bathroom with power shower and two bedrooms with fitted wardrobes. Recently redecorated, the apartment is fully alarmed and has laminate wood flooring throughout. The development, which was built over nine years ago, comprises three residential blocks with some 200 units - all of which have access to mature landscaped gardens.

Where? On Arran Quay, apartments in this development offer buyers ultimate city living, with O'Connell Bridge about 15 minutes walk away and easy access to all city centre hotspots. Administration offices of the Four Courts occupy part of this secure and well-maintained development.

How much for investor? After stamp duty at 5 per cent (€13,250) and legal fees of 0.5 per cent (€1,603) are taken into account, the acquisition cost of this apartment is €279,853. On a 90 per cent mortgage at a tracker rate of 3.1 per cent over 20 years, the annual repayments would be €16,016. This represents a shortfall of €4,516 a year when rental income of €4,516 per annum (at €1,1150 per month and allowing for one month's void and one month's costs) is taken into account.

The annual repayments on an interest-only mortgage would be €7,394, giving a surplus of €4,107 and a yield of 4.3 per cent. An investor requiring payments equal to rental income on an annuity mortgage would require a 50 per cent mortgage at 3.1 per cent over 20 years.

How much to buy? With acquisition costs of €243,800, a residential buyer with a 60 per cent mortgage on a tracker rate of 2.95 per cent over 20 years will have annual repayments of €10,534 and interest-only repayments of €4,691. On an 92 per cent mortgage at a tracker rate of 3.1 per cent, the annual repayments will be €16,372, while on an interest-only mortgage they will be €7,558.

Stamp duty required: None for a first-time buyer but €13,250 for investors and others.

Solicitors fees: Traditionally 0.5 to 1 per cent of the purchase price. However, some solicitors are willing to negotiate a fixed fee.

Service charge: A maintenance fee of €1,200 is payable every month.

Potential: With a potential rental return of €1,150 per month, Arran Quay Apartments are in a good rental area on the doorstep of the city centre. Rental income would more than cover the 90 per cent interest-only mortgage mentioned above, but would fall short by over €4,500 of the annuity mortgage.

Verdict: Investors with a bigger mortgage than the one quoted may struggle to cover the mortgage but the long term capital appreciation looks good in this city centre location.

Calculations by Simply Mortgages

- Fiona Tyrrell