Excellent Investment Opportunity
I received an email today detailing several new houses for sale in the Clayton Village neighbourhood (Cloverdale). The homes were previously priced at $550,000 and have been drastically reduced to $419,000. They are brand new 3 level homes, 2652 square feet on 3000 square foot lots. Here is a breakdown of the numbers to consider for investment.
Cost
Price: $419,000.00
Plus Suite: $18,000.00
Price With suite and GST: $458,850.00
Downpayment (20%): $91,770.00
Mortgage: $367,080.00
Monthly Payment: $1747.87
Monthly Taxes: $200.00
Monthly cost with taxes: $1950.00
Expected Rent
Upstairs: $1,700.00
Basement: $800.00
Total: $2,500.00
Subtract Monthly cost $1950.00
Positive cash flow: $550.00
Initial investment
Down Payment: $91,770.00
Property Transfer Tax: $5,500.00
Legal Fees and additional Closing Costs: $2730.00
Total cost of investment: $100,000
Yearly Return On Investment:
$550.00 per month = $6,600.00
6.6% on $100,000
This 6.6% return on investment does not factor in the inflation on the value of the home. Although we are not expecting any kind of inflation in the near future, real estate prices in the Fraser Valley have historically doubled every 11 years (roughly 6.5% per year). I won’t pretend there aren’t risks involved with being a landlord, but owning a property that pays you monthly while it goes up in value in the long term has proven very profitable for many savvy investors. It has been YEARS since we've seen rental property opportunity that offers positive cash flow like this.
If you do not have $100,000 sitting in a bank account waiting to be invested, consider the equity in your home. The $550.00 per month positive cash flow will more than cover the interest needed to use $100,000 of the equity in your home.
These homes are the second Phase of a project from a reputable builder. The last 8 homes in Phase 1 sold in 3 days in December.
Please contact The Schacter Team for more details.