Real Estate

Would you buy this property?

  • Last Updated:
  • Jun 25th, 2020 3:27 pm
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[OP]
Newbie
Feb 7, 2019
82 posts
28 upvotes

Would you buy this property?

So, here is what I am contemplating and would like to hear your thoughts:
- I am looking into a nice condo that costs 310,000 $ (Edmonton). It rents for 1,800 $ minimum.
- My HELOC is 2.5%, so if I buy it annual interest will be 7,750, or about 650 $ a month.
- Maintenance fee is 450$. So, about 1,100 $ for the interest and maintenance, and will the remaining 600 - 700 $ per month I can pay the principal.
Is this a good deal, in your view?
5 replies
Member
User avatar
Mar 17, 2006
377 posts
40 upvotes
On paper yes the figures add up but!

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[OP]
Newbie
Feb 7, 2019
82 posts
28 upvotes
The_Professor wrote: What about property taxes?
You are right - property taxes of 250$ per month, which actually leaves 350-450 $ monthly to pay the principal.
Deal Addict
User avatar
Jan 14, 2007
3108 posts
389 upvotes
GTA
Jyelong wrote: You are right - property taxes of 250$ per month, which actually leaves 350-450 $ monthly to pay the principal.
You still have to factor in plenty of other potential costs like repairs, hiring an agent to find tenants, cleaning between tenants, etc. I'm not a landlord so know very little about this but I think you have to do a lot more homework before you can decide whether it'll be cash-flow positive.
Newbie
May 25, 2020
24 posts
11 upvotes
Ottawa
Seems very marginal to me based on just what youre saying. Youre bringing in 21600 a year in rent, and youre paying 3000 in property tax, 500 for insurance, call it 3000 for maintenance, and 5400 in condo fees. That nets you 9700 a year, which puts your net cap rate at 3%. If you can only get money at 2.5% youre barely profitable, let alone cashflowing. I dont know enough about edmonton real estate to speak intelligently on it, but I cant imagine theres much upside in terms of appreciation unless the price of oil gets back to 80 or 100 a barrel and stays there. At the end of the day probably not something I would buy unless you think youre getting a steal on the buy price, and even then it would need to be 10-20% under market price to make it worth it for me

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