interested
Senior Member
There's a 450 sqft unit. I think the layout's pretty good. I have a friend who's interested in purchasing for investment purposes. It's $300K.
This building will probably take 5 years to build. The market should most likely be more stable by then as well. I think this building will hold its value. What do you guys think?
http://www.menelikfernandes.com/wp-content/uploads/2010/11/1br.pdf
In view of the heritage designation likely any view he gets may well be maintained, a definate plus. Location fo building. Excellent.
Price: This has been debated alot and I don't think at $667/sq.ft. it makes alot of sense as a rental. To live, another story but you say it is an investment.
Rent based on $2.50/sq.ft would be $1125. Let's assume because of location you can get $1400 for this a very small one bedroom (more like the size of bachelors elsewhere). Taxes:$250/month. Insurance $10/month. Condo fees (based on 45 cents (I am just plugging in a figure) $202/month. Assuming no vacancy and no real estate commission (that your friend will advertise himself) say $10/month(assuming it is $120 for an ad to run a few days): means minimum of $472/month.
Even assuming your friend has 100 percent of the cash: His return is$928/month x 12 or $11136/310000(allowing for his legals LTT and soft closing costs of $10000) is 3.6%. This has assumed pretty ideal conditions: no vacancies, no realty fees, high rent on a sq. footage basis of over $3.00/ft which is beyond C01 non luxury rents presently and there has been no rent increases the past few years.
It better appreciate in value because it is barely a breakeven if he has 3.5% financing or accepts 3.5% on his money and he better hope that interest rates are not up at that point in time or property values down.
If you are speculating about where interest rates or the market will be in 5 years, who knows. Big risk but that is my view only.
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