Address: Victoria Heights, Victoria Road, North Acton, London W3.

Agent: The Prestige Group.

Property type: two-bedroom apartment for €404,752 (£274,900).

What do you get? Victoria Heights is a development of 250 apartments in four blocks. The two-bedroom apartments are from 56sq m (607sq ft). The Prestige Group has purchased a block of 50 apartments. Buyers are guaranteed 6 per cent gross rental yield in the first year following completion.

In addition, they get 6 per cent interest on their deposit. The apartments come fitted out and have main bedroom en suites, as well as separate bathrooms. The earliest completion date will be October 2006.

There are car-parking spaces but buyers can rent a car space with nearby Carphone Warehouse for €1,467 (£1,000) a year.

There are also studio apartments at €273,581 (£186,400) and one-bedroom apartments at €324,971 (£221,400).

Where? Situated just off the A40 in west London in zone two of London's transport infrastructure and 50 yards from North Acton tube. Neighbouring areas include Chiswick, Shepherd's Bush, and Ealing and Park Royal.

How much for an investor to buy? With stamp duty at 3 per cent and legal fees at 0.5 per cent plus VAT, the acquisition cost comes to €418,151 (£284,810).

Assuming a strong purchaser, repayment on a Bank of Ireland 90 per cent annuity mortgage at 6 per cent variable over 20 years is €31,228 (£21,270). On an interest-only mortgage this is €21,793 (£14,845). With a projected annual rental income of €21,135 (£14,400), this would leave a shortfall of €10,083 (£6,870) per annum.

On an interest-only mortgage this would leave a surplus of €652 (£445).

On a 44 per cent mortgage at a 6 per cent variable rate over 20 years, the investor would break even on an annuity mortgage.

How much to buy? A residential buyer with a 60 per cent mortgage over 20 years at 5.75 per cent variable will have an annual repayment of €20,395 (£13,896). On an interest-only mortgage that would be €13,989 (£9,484).

On an 80 per cent annuity mortgage over a period of 20 years at an interest rate of 5.75 per cent, the annual repayments are €28,172 (£19,196), and on an interest-only mortgage option, they would be €19,227 (£13,101).

Potential: the development's proximity to central London, and Park Royal (an area undergoing regeneration and set to see its population double to 100,000 in the next five years) is promising. The projected rental return per month is €1,761 (£1,200) for a two-bedroom apartment.

Verdict: while only a cash-rich investor will be able to cover the mortgage repayments with the rental return, the long term prospects look good because there is currently little competition in the area in the way of residential development.

The area around Victoria Heights is predominantly commercial with companies, like NEC, and the European support centre for the Carphone Warehouse, in the vicinity. As a result, the prospects of being able to let the property are good.

Calculations by Simply Mortgages