Worth The Investment

The address: 9 Prince Edward Terrace, Blackrock, Co Dublin.

The property: 330sq m (3,552sq ft) end-terrace house in four two-beds for €1.8 million.

The agent: Sherry FitzGerald.

The landscape: Prince Edward Terrace is a row of period houses on Carysfort Ave with views over Carysfort Park within walking distance of Blackrock village.

The features: refurbished in 2002, the apartments feature attractive kitchens and wooden floors. To the rear there are four car-parking spaces, accessed via a remote-controlled gate.

How much for an owner-occupier?Stamp duty on €1.8 million is zero for first-time buyers and €117,250 for investors or people trading up. A first-time buyer could secure a mortgage of up to 92 per cent, or €1.656 million, at 2.4 per cent (one-year fixed) with AIB over 35 years. This would mean repayments of €5,829.12 a month. Alternatively, they could opt for a variable rate of 2.75 per cent leaving repayments of €6,143 a month. This excludes mortgage interest relief which could reduce the payment by up to €416.66.

How much for an investor?Stamp duty of €117,250 brings the total cost for investors to €1,917,250, giving a yield of 3.7 per cent. An investor could raise €1.26 million, or 70 per cent of the purchase price. On a full payment basis this works out as €6,375.60 a month over 25 years and €3,780 a month interest-only. These figures are based on a two-year fixed rate of 3.6 per cent with AIB.

Potential?Three of the four apartments are currently rented, according to the selling agent. When all four are occupied the building brings in €5,900 a month (€70,800 a year).

Verdict?Fully rented and not allowing for void periods, an investor would not cover their monthly repayments on a full payment basis but, on an interest-only basis, it comfortably washes its face.

Calculations by Simply Mortgages