Hi sprocket1200.
Here the latest project in detail:
Expenses $/monthly
- Heat 200$ (equal billing)
- Hydro 145$ (two are incl, 3 are own hydro- next must be own hydro)
- Water 165$
- Taxes 175$
- insurance 100$
- Lawn/Snow Service 50$ (neighbor)
- Management Fee 200$ (me now, maybe later a PM company)
- Vacancy 115$ (3%)
- Mortgage 1019$ (190,000$/4.19%/5y fix/25y amor.)
- Repair/Maintenance 240$ (approx. 6%)
total: 2,409$/ monthly or 28,908$ annually
Income
4,065 monthly or 48,780$
48,780 - 28,908 = 19,872$ Profit (or 1,656$ monthly).
NOW... you have to calculate the Return of Investment (ROI), means the money I put in (here $70,000, because I added $10k for legal expenses, taxes and "safety net") and not 250,000$. The lower the down payment the higher the leverage, but also the risk. I use roughly 20-25% all the time, as it keeps it easier with the banks. Thru CMHC it can or could go down to 5% down, but I am not sure if they now ask for 15% down.
If I would pay down the $250,000 + $10,000 in full, the numbers would not be so attractive. Indeed, but I invested 70k and should get roughly 20k back annually. This is a ROI of approx. 28%.
Now, particular with this deal I was very lucky, as I was approached directly by the owner. He wanted to sell fast and quite. That's why I got it roughly 15% below market price.
I mentioned it before: I use KISS... Keep It Simple System, which means, I will discuss with my accountant, should we appreciate or I will pay taxes. It might sound strange, but I don't have a problem with paying taxes as long as I have button line something to work with later, too.
This year I will donate some amount to my local Habitat For Humanity.
I hope I was able to help you a bit.
Write me a PM if you have further questions.
BR,
Alex.