The address:Apartment 35, Block E, Smithfield, Dublin 7.
The agent:Gunne.
The property:larger than usual two-bedroom apartment on the second floor with a price tag of €635,000.
The landscape:Smithfield has benefited from a major rejuvenation in the last few years. This recently-built landmark development overlooks the public plaza.
The features:Number 35 has the added benefit of Section 23 tax relief available so it should prove of particular interest to investors looking for a city centre unit. It comes to the market in very good condition. The scheme has 24-hour concierge service, large balconies off bedrooms and the lounge area, underfloor heating in all bathrooms and a communal roof garden. One underground car-parking space comes with the apartment.
How much for an investor to buy?At AIB's buy-to-let tracker mortgage rate of 4.85 per cent, the repayments on an 85 per cent mortgage (€539,750) would be €3,104 a month over 25 years. On an interest-only mortgage based on the same rate and term, the repayments would be €2,181 a month.
How much for a residential buyer?A single first-time buyer would need a salary of €635,000 to fund a 100 per cent mortgage over 35 years, while a couple would need to earn around €82,000 each. Based on AIB's one-year discount tracker rate of 4.32 per cent, the loan would cost €2,940 a month for the first year. On its standard variable rate (SVR) of 4.94 per cent, the repayments would then be €3,137. On a 92 per cent loan of €584,200 the repayments would be €2,705 in the first year and €2,886 based on the SVR.
Potential:this apartment should fetch €1,800 in rent per month, according to the selling agent. Maintenance fees are €2,000.
Verdict:while even the interest-only mortgages would be almost €400 more than the predicted monthly rental income, the full Section 23 tax allowance may make this city centre apartment a tempting buy for investors keen to reduce their tax bill and willing to sit it out for long-term gain.
Calculations by AIB
