WORTH THE INVESTMENT

Address: Cross Street, New Ross, Co Wexford.

Agent: ERA Byrne auctioneers.

Property type: building containing two apartments and one empty commercial unit for €315,000.

What do you get? A 150-year-old former store converted into a two-bed apartment the width of the first floor, a one-bed 35sq m (380sq ft) apartment and an empty 35sq m (380sq ft) commercial unit on the ground floor.

The one-bed apartment comes with a sitting tenant and has an open-plan kitchen/dining/living area, bathroom, electric shower and a bedroom that fits a double bed and wardrobe.

A two-bed 56sq m (600sq ft) apartment has a dining/livingroom with a wooden floor, electric fire, bathroom and kitchen with appliances and a laminated floor.

All of the units have electric storage heating and are individually metered for electricity and have their own access. Parking is on-street. The commercial unit is currently a shell and would need to be fitted out as either a commercial unit or an apartment subject to planning permission.

Where? Within walking distance of the town centre near the Three Bullet Gate area of the town.

How much for an investor? With stamp duty at 5 per cent, legal fees at 0.5 per cent, the acquisition cost is €332,656. The expected monthly rent for the one-bed and two-bed apartments combined is €1,018 per month and €10,183 per annum, assuming one month costs and one month vacancy for both.

Annual repayments on a 90 per cent annuity mortgage over 20 years at a PTSB tracker rate of 3.1 per cent would be €19,038. which would leave a rental shortfall of €8,855 per annum.

On an interest-only mortgage there would be a surplus of €1,395.

At a 48 per cent mortgage at 3.1 per cent over 20 years, the repayments would be €10,183, meaning the investor would break even.

The surplus on an interest-only mortgage would be €5,482.

Potential: currently the one-bed fetches €100 per week rent, and the estate agent handling the sale reckons the two-bed would get around €135 per week . If planning permission was secured to turn the third unit into a residential unit it could potentially fetch an another €100 per week.

Verdict: at first glance the €315,000 price tag for this three-unit building would seem low but this takes into account that the buyer will need to fork out to turn the commercial unit into an apartment, subject to planning permission for a change of use. As it stands, with a modest rental yield, only a cash-rich investor would break even on this investment.

Calculations by Simply Mortgages