The Old Stable Mews (Section 23)
Key Features :
Size
882 sq. ft -1,228 sq ft
Cost
€465,000 all inclusive
Loan package organised
€372,000
Cash equity required
€93,000
Annual interest payments
€20,460- This will be fixed from the drawn down date for
10years
Annual rent
€20,460 – This will match the interest payments to the bank
No ongoing funding costs Both the interest payable to HSBC Bank and the rent
receivable will be fixed from the draw down date for the 10
year period.
Buy-back and sell-back rights :
Lease-back term : 10 years
Operators right to extend lease :None
Buy-back : There will be a put and call option agreement to provide for the purchase of the Old Stable Mews by CastLe Leslie Estate, which will be exerciseable at the end of year 10.
Buy back security: This purchase obligation will be personally guaranteed by Samantha Leslie. As the properties are located in a central part of the estate, it is important that the Leslie family control the long term ownership of these properties.
Buy-back and sell-back price: €465,000 ( 100% of the original cost)
Financial analysis :
Capital Allowances: €372,563
Net tax savings (at the 46% tax rate): €171,379
Investors Equity : The investors investment of : €93,000 will be returned at the end of the 10 years Investor annual rate of return for cash invested 23% per annum for 10 years
Benefit Summary
Tennant
The Old Stable Mews will be operated by Castle Leslie Old Stable Mews Management Limited
for the 10 year period.
Rental income/ Interest payments to the Bank
Under the terms of this lease, the rent to be paid to the investors will equal the interest amount to be paid to HSBC bank to service the HSBC investor loan.This will be paid directly to HSBC bank.This payment will be personally guaranteed by Samantha Leslie. 6 months rent will be on deposit at all times.
Capital allowances
Investors will benefit from capital allowances available against Irish rental income for approximately 80% of the cost the unit. Capital allowances are €372,563 . The net tax saving to each investor is €171,379.
Equity Invested
Each investor will invest €93,000, which is 20% of the purchase price. The full €93,000 will be returned to each investor in year ten when the Old Stable Mews is purchased by Castle Leslie Estate.
Funding
HSBC have been approached regarding the required borrowing and they have agreed to make a facility available to the investors. The term is for 10 years with a fixed interest rate from the drawdown date. Interest payments will be made directly by the tenant to HSBC Bank.
Usage
Owners are entitled to two weeks free usage of one of the Old Stable Mews every year. Usage is transferable so the owner can from time to time nominate any friend, relative or colleague to take up some usage. Access to Castle Leslie(owners only) and all the other facilties on the Estate will be made available.
Discounts
Owners are entiled to a 25% discount of standard rates for extra use of the Old Stable Mews. This discount right is not transferable