The address:16 Ballycasey Court, Shannon, Co Clare.
The agent:Sherry FitzGerald McMahon.
The property:four-bed semi for €245,000, representing a cost of €1,944 per sq m (€180.5 per sq ft).
The landscape:near Shannon town centre and the airport.
The features: on a large site with ground to the side, this 126sq m (1,350sq ft) house has a livingroom, shower room, kitchen/diningroom, a main bathroom and a shower room. It has oil-fired central heating.
How much for an investor?The acquisition cost, including stamp duty and legal fees of 0.5 per cent, comes to €256,282. On a 90 per cent mortgage over 20 years at a PTSB 0.9 per cent tracker rate of 4.15 per cent, the annuity mortgage repayment would be €16,244 per annum (€1,353 per month). On an interest-only loan the repayment would be €9,923 per annum (€826 per month). If the annual rent is €9,500, taking into account one month's costs and one month's void, the shortfall would be €6,744 per annum (€562 per month) on an annuity mortgage and €423 per annum (€35.25 per month) on an interest-only mortgage. This represents a yield of 3.9 per cent.
To break even on the rent, an investor could take out a 53 per cent mortgage over 20 years at a PTSB 0.9 per cent tracker rate of 4.15 per cent. On an interest-only mortgage there would be a surplus of €4,148 per annum (€345 per month). This represents a yield of 3.9 per cent.
How much for a residential buyer?On a 92 per cent mortgage over 20 years at a Bank of Scotland Ireland discount tracker rate of 3.95 per cent, the annual repayments would be €16,319 (€1,359 per month). On an interest-only mortgage the repayments would be €8,903 per annum (€741 per month).
The potential:a four-bed house in this area should fetch a rent of around €900-€1,000 a month.
Verdict:a large site with potential to extend centrally located in a town that has undergone much redevelopment. It's good value but interest rate rises still make it difficult to cover annuity mortgage repayments with rent.
