Hi everyone,
I hope this is okay - I`ve outlined below a property I`m very interested in. Based on the numbers shown it`s negative cash flow, but I`m looking for advice on what to change. Some things that I know I should change are both interest rates and the mortgage term.
When it comes to rent, am I better off being safe with a lower but acheivable rent, or should I budget for what I think I might be able to get? Simply changing to financing options and increasing the total rent to $42,00 takes it from -$409 to +$771.
The property is located in the GTA with good access to transit, schools, parks. Property has ample parking.
Any input is greatly appreciated! Sorry for the formatting - it was all lined up nicelybefore I posted it...
Total Purchase Price $597,875 incl. Closing
Total Revenue $3,720
Expenses
Finance - Mortgage $2,823
Finance - DP - LOC $479
Operating $827
Total Expenses $4,129
Net Cash Flow: -$409
Purchase Costs
Purchase Price $575,000
Downpayment 20% $115,000
Balance $460,000
Closing Costs
Legal $2,000
Title Ins. $500
Inspection $1,000
Land Transfer $14,375 Estimate at 2.5%
Renovation $5,000
Total Closing $22,875
Finance Costs
Mortgage
Balance $482,875
Rate 5%
Term (years) 25
Payment $2,823
Downpayment
Amount $115,000
Interest rate 5%
Annual Interest $5,750 Interest only
Monthly Interest $479
Revenue
Monthly Annual
Basement Rental - 3 BR $1,120 $13,440
Main Floor Rental - 3 BR $1,300 $15,600
Second Floor Rental - 3 BR $1,300 $15,600
Total Revenue $3,720 $44,640
Non-financing (Operating) Expenses
Monthly Annual
Heat (gas) $183 $2,200 Current
Electricity $50 $600 Cmmon areas only
Water $33 $400
Taxes $385 $4,625 assume increase from current
Insurance $92 $1,100 Current
Summer maint. $42 $500 Estimate
Winter maint. $42 $500 Estimate
Reserve
Total Expenses $827 $9,925
I hope this is okay - I`ve outlined below a property I`m very interested in. Based on the numbers shown it`s negative cash flow, but I`m looking for advice on what to change. Some things that I know I should change are both interest rates and the mortgage term.
When it comes to rent, am I better off being safe with a lower but acheivable rent, or should I budget for what I think I might be able to get? Simply changing to financing options and increasing the total rent to $42,00 takes it from -$409 to +$771.
The property is located in the GTA with good access to transit, schools, parks. Property has ample parking.
Any input is greatly appreciated! Sorry for the formatting - it was all lined up nicelybefore I posted it...
Total Purchase Price $597,875 incl. Closing
Total Revenue $3,720
Expenses
Finance - Mortgage $2,823
Finance - DP - LOC $479
Operating $827
Total Expenses $4,129
Net Cash Flow: -$409
Purchase Costs
Purchase Price $575,000
Downpayment 20% $115,000
Balance $460,000
Closing Costs
Legal $2,000
Title Ins. $500
Inspection $1,000
Land Transfer $14,375 Estimate at 2.5%
Renovation $5,000
Total Closing $22,875
Finance Costs
Mortgage
Balance $482,875
Rate 5%
Term (years) 25
Payment $2,823
Downpayment
Amount $115,000
Interest rate 5%
Annual Interest $5,750 Interest only
Monthly Interest $479
Revenue
Monthly Annual
Basement Rental - 3 BR $1,120 $13,440
Main Floor Rental - 3 BR $1,300 $15,600
Second Floor Rental - 3 BR $1,300 $15,600
Total Revenue $3,720 $44,640
Non-financing (Operating) Expenses
Monthly Annual
Heat (gas) $183 $2,200 Current
Electricity $50 $600 Cmmon areas only
Water $33 $400
Taxes $385 $4,625 assume increase from current
Insurance $92 $1,100 Current
Summer maint. $42 $500 Estimate
Winter maint. $42 $500 Estimate
Reserve
Total Expenses $827 $9,925