Worth the investment

Investment opportunities

Address: 68 Seville Place, Dublin 1.

Agent: Gunne Residential.

Property type: six-bed corner house at €500,000.

What do you get? This 155sq m (1,650sq ft) property needs updating. It has an entrance hall with understairs storage, a livingroom and diningroom and a kitchen/diningroom with a range of fitted wall and floor units and a stainless steel sink. The sittingroom has a Velux window and shelving. The first floor bathroom has a bath and separate toilet. There are three bedrooms with fitted wardrobes and shelving on the upper levels.

Four of the bedrooms are doubles and two are singles. Parking is on-street to the front with a vehicular side entrance to the courtyard and a private walled rear garden.

Where? Off Amiens Street, within walking distance to the IFSC and near Connolly Station.

Stamp Duty: €37,500.

Legal fees: €3,035 (0.5 per cent plus VAT).

How much for an investor? Total acquisition cost, including stamp duty and legal fees, is €540,525. A 90 per cent mortgage at a tracker rate of 3.1 per cent would require annual repayments of €30,219 over 20 years. In its present condition rental income is calculated at €22,000 per annum, including one month's void and one month costs, leaving a shortfall of €8,219. The repayments on an interest-only mortgage are €13,950, leaving a surplus of €8,050.

A 66 per cent mortgage at a tracker rate of 3.1 per cent would require an annual repayment of €22,000, allowing the investor to break even. An interest-only mortgage would give a surplus of €11,844.

How much to buy? A residential buyer with a 60 per cent mortgage at a tracker rate of 2.95 per cent over 20 years would have to make annual repayments of €19,876. On an interest-only mortgage these repayments would be €8,850 per annum. With an 80 per cent mortgage at a tracker rate of 3.1 per cent over 20 years the annual repayments would be €29,039. On an interest-only mortgage the repayments would be €13,405.

Potential: in its current condition without refurbishment this house could make a rental return of €26,400 per annum or €2,200 per week but that would increase if the property was renovated. It could also potentially operate as a hostel.

Verdict: the current rental return is not huge and the area has long been regarded as deprived. But it scores as a long term investment, as it's close to the IFSC, Luas and city centre in an area that is currently undergoing a massive €762 million rejuvenation under the North East Inner City integrated area plan.

Calculations by Simply Mortgages