Building Fourplex Apartments/Condos In Canada

Until a few weeks ago I had never really thought of investing in real estate.  By far the main factor in my refusal to think about purchasing an income property is the Pain In The Ass (PITA) factor.  See, I’m not much of a handyman and it’s all I can do to keep my own place up to snuff.  I definitely don’t want to have to deal with idiot tenants breaking stuff that I don’t have the time or the inclination to fix.  In fact, dealing with clients and mortgage brokers in general kind of scares me.  I hear these horror stories about renter’s rights and nightmare tenants and I think that no ROI could be worth that headache!  When you combine the PITA factor with the relatively high cost of Canadian real estate right now and high land taxes, it was never an attractive proposition to me.  I figured that a few REITs in my investment portfolio would be about all the exposure to real estate I’d ever want.

Related: Investing In Real Estate Without All the Risk

My Friend the Math Genius/Handyman

So what changed?  Basically my buddy presented me with an interesting thought (and that’s all it is for the moment, a mere thought or consideration with nothing solid in place) about how I could invest in real estate and almost completely eliminate the PITA factor.  Now I can already hear the groans in the peanut gallery about taking investment advice from a friend and why that can often lead to trouble.  The vast majority of the time I would be saying the same thing, but in this case I truly believe him.  Here are a few reasons why I think my friend James (all names changed for privacy purposes) and Steph (his common-law wife) would make much better landlords than myself, and why I think their plan has a lot of merit.


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They’re really good at math.  This might sound simplistic, but I find that many Canadian investors don’t have a solid grip on financial realities.  This can lead to all kinds of errors and miscalculations concerning profitability.  James works in agribusiness and had a math minor in university.  Steph is a high school teacher that specializes in advanced math.

2) They’re both very even-keeled.  I try to stay level, I really do.  I know it’s better for my heart and that people would probably like to be around me more.  It hasn’t really worked yet.  I prefer to think of myself as impassioned as opposed to being too emotional.  James and Steph have the whole low blood pressure thing down.  If anyone could deal with a little property manager-related stress it’s these two.

3) James is very handy and has valuable experience.  During the summers James used to do repair work for the Ontario Provincial Government.  His job was basically to go into low-income housing that the government owned and fix everything that needed to be maintained.  This is in addition to the fact that the guy is just pretty damn smart and is able to problem-solve things that would stump me in perpetuity.

4) Family Connections.  James’ dad is an electrician and his Father-In-Law is a plumber.  These are obviously very valuable skill sets to have at your disposal.

5) Great Work Ethic.  I’ve known James for a long time and his work ethic is second to none.  He will not hesitate to put in the time necessary to make the whole landlord deal work.

6) Location. Location. Location.  James and Steph live in Saskatoon.  If you’re not familiar with the small city, it is located in one of the most economically vibrant parts of Canada.  Not only is there a booming economy in the area, but also a fairly diversified one.  Oil is a major factor, but so is potash and other resource extraction, as well as an agricultural industry that is as healthy as it has been in a long time.  Rental rates for multi-family units in the 900-1,000 sq. ft. range typically rent for $1,500-$1.800.

Four Times the Fun?

While James and Steph have modest initial plans for dipping their big toe into real estate (renovating a basement suite on a newly purchase house) their eventual plan would be to own a fourplex, and possibly to expand from there as they build equity.  Just for information’s sake, they have kept an eye on the market for multi-family units for a while now and they reported that nothing has even went to market for some time in the high-demand area (admittedly private deals could have been done with no public record).  Consequently, they are tossing around the idea of building a new fourplex 3-4 years down the road.

Related: How to Rent our Your Basement Suite: Part I

Obviously there are advantages and disadvantages to building a new structure with the goal of making it an income property.  First and foremost, James and Steph have found out that it is much harder to secure financing for a new structure as opposed to buying something that is already in place (this might actually work to my advantage as a silent partner who basically can only provide capital and some grunt labour in the summers).  Even when you consider that there will be far fewer repairs on a new building, the initial building cost will likely mean that it will just be more expensive (re: less profit margin) to build a new structure than to purchase an old one.

Related: What to Consider Before Buying a Condo

On the other hand, James raised an excellent point that he would be familiar with his four properties in a way that most landlords never could be, having helped build it from the ground up.  We reasoned that as long as we could secure the services of a decent contractor for a little while, we could provide a lot of the raw horsepower needed for building ourselves.  James’ father and FIL would obviously be valuable resources to tap into as well and would likely provide their services at a steep discount off of the market rate.  The massive energy efficiency advantage that a new structure would provide should not be discounted over the long term either.  James and Steph love the Saskatoon area and want to stay there the rest of their lives, so they will be able to reap the benefits of building new structures for several decades.

The Numbers

After chatting with each over beers a few weeks ago (don’t all investments sound better after a few cold ones?) we’ve each done some reading and tried to put some extremely preliminary numbers down on paper.  Then we thought the best way to see if we were on the right track was just to make the figures public and see if people agree that they were realistic or if they would poke holes in them.  I had supper with an old teaching mentor a couple weeks ago (shops teacher) and in his “retirement” he’s busier than ever putting up a four-plex this summer in Western Manitoba.  He says it’s going to cost between 600K and 620K.  It sounds like the units being built are pretty similar to what our thoughts were, so I think this is a good starting point.  James’ thoughts were that he lived a little out of town and that Saskatoon was expanding out his way.  Just for preliminary numbers, let’s say it’s going to cost 650K to buy the lot and house (remember, this isn’t right in Saskatoon and we’re getting cut rates on our tradespeople).

For kicks, let’s do the fun part first.  On the revenue side of the equation, let’s say we can get $1,600 a month for each 1,000 sq. ft. multi-family unit with a one-car garage and is located 10 minutes out of town.  That’s $6,400 a month.  I think that’s a pretty accurate number to start with.

While it’s a nice thought to imagine that money pouring in, let’s take a look at what we figured the ballpark monthly expenses would be:

Mortgage: $3,200 (500,000 mortgage, 150,000 down, 25 year amortization mortgage calculated at 6% since interest rates aren’t likely to stay low forever)

Taxes: $900 ($11,000 yearly)

Insurance: $300

Vacancy Rates of 10%: $640 (most guides said to estimate 10-15% vacancies, but this is a pretty hot market and looks to be for some time)

Repairs: $540 (I know most real estate guys will say 2-3% for repairs, but I used 1% since these will be brand new units for at least a few years)

Total Estimated Monthly Costs = $5,580

Total Estimated Monthly Profit = $820

Total Estimated Yearly Profit = $9,840

Estimated pre-tax ROI ($150K down) = 6.56% (This is without considering the increased monthly equity)

Obviously with a ROI of 6.56% this isn’t a get rich quick scheme.  I do know that there are other considerations such as the sweat equity and the headaches James and Steph would have as property managers.  The increased equity and tax write-offs would help shelter some of our profits from the tax man, but clearly this would have to be a long-term investment to be worth it from an investment standpoint.

So what’s the verdict?  Do any of you have some real estate experience and feel like helping a couple of rookies out?  Do these numbers appear sensible at first glance?

35 Comments

  1. krantcents on August 13, 2013 at 7:46 pm

    The most important question is do you want to be in partnership with him? Money has wrecke dmore than a few friendships. If you do this, be sure to put everything in writing including you exit strategy.



  2. Fiscally fit on August 14, 2013 at 2:00 am

    Looks pretty good. Only thing I would look at is how to structure the property. Is it going to be personally held or in a corp? Besides the tax deductibility and income issues, corp might be the way to go if you want to add more units or sell the properties all together in the future.



  3. Tracey H on August 14, 2013 at 7:36 am

    Are you sure your insurance number is right?

    Also, bump up your maintenance number and put the surplus aside for when costs start to go up (not to mention something quite unexpected) for safety’s sake. And have a separate fund for possible damages (you’re trusting that your tenants will all be good tenants).

    Also, how are you going to split the ROI? You’re putting in the down payment & they’re managing it (I assume). Are you splitting the ROI in half or giving them a management fee?



  4. retirebyforty on August 14, 2013 at 7:53 am

    Jeez, housing is expensive up there.
    It’s really great that he has family connection to help with the repairs and can do some DIY.
    Sorry, I’m not much help. Good luck!



  5. Teacher Man on August 14, 2013 at 9:24 am

    That’s ok, thanks for stopping by Joe! Keep updating us on your landlord adventures!



  6. Teacher Man on August 14, 2013 at 9:29 am

    Great questions and suggestions Tracey. The insurance number is pretty consistent with what I’ve seen most places. I don’t think it’d be more than $400 at the very most, but obviously I don’t have a specific quote or anything like that.

    So you think maintenance costs at more than 1% even on a new house eh? Was this your experience?

    In terms of splitting the ROI, I assume we’d have to pay them as property managers – which we could then deduct on taxes of course. I would be fine with whatever they thought was fair since I trust their values that much. The thing to consider about the ROI is that I only calculated it for the cash flow, but the equity getting built up on the fourplex itself should be considered ROI right?

    Overall, what was your opinion on the entire venture Tracey?



  7. Teacher Man on August 14, 2013 at 9:30 am

    Good point KC. I would absolutely want to be in partnership with both of them. I don’t have too many friends (maaaaybe 5) I would make this claim about, but these two, most certainly. Putting everything in writing would be a must though I agree, just to make sure everyone was on the same page.



  8. Teacher Man on August 14, 2013 at 9:31 am

    I agree. My thought was that a corp would be easiest for the reasons you outlined. Thanks FF.



  9. Tracey H on August 14, 2013 at 12:07 pm

    1% might be okay for a few years, but won’t be once it ages. And you should build up a fund in case of something major needing an early repair. If you save 2% and it builds up too high, you could stop contributing for awhile, but I wouldn’t do that early.

    Yes, equity built up as the mortgage is paid off is ROI, too (and very important). Once that mortgage is gone, the income is much higher for you.

    Overall, it looks like a reasonable plan to me. I’m assuming the economic forecast for the area will continue to be good.



  10. Teacher Man on August 14, 2013 at 5:42 pm

    Right, that makes sense. By doubling the maintenance costs we could put some money away for the inevitable rainy day.

    It would be many years before the mortgage was gone, but if we decided to sell 20 years into the deal it would be a nice pay day as well.

    The economic forecast I believe will continue to be strong. There are recessions resistant jobs in the city as it is a major service centre for outlying areas and has a fairly large post-secondary population. In addition, the sheer amount of various types of resource extraction going on in the area makes it highly unlike in my estimation that housing demand would shrink for the near future.



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  12. Financial Uproar on August 14, 2013 at 11:59 pm

    Maybe I’m greedy, but I’d never get into a risky asset like real estate for a mere 6.5% return. You need capital appreciation for the four-plex to be lucrative, and I don’t think any Canadian real estate has much room to appreciate further.

    Plus, leverage makes this deal incredibly risky. Taking on 4x leverage for such a tiny return is just asking for trouble. Real estate needs a margin of safety, and this deal has none.

    Your calculations are conservative, I’ll give you that. And all your costs are realistic. It just makes me nervous when people buy at the top of the market and try to talk themselves into thinking there’s zero risk of it going down. I bought my real estate while the sector was unloved, and made 15% net returns. (Not on the down payment. On the whole property.)

    So anyway, I wouldn’t touch this deal.



  13. Teacher Man on August 15, 2013 at 9:20 am

    Thanks for the response Nelson, I figured you’d have some insight here.

    You definitely raise some solid points. Could you make an argument that even if the Canadian housing sector is looking at a 30% correction (or higher, I’m just pulling that number out of my ass) a new fourplex in that area would be pretty resistant to much of a devaluation? My thought was that using economies of scale in building the fourplex would allow us to keep expenses down enough that it would be very hard to lose money if we absolutely had to sell for some reason.

    Doesn’t the theory that we’re looking at this over a 20+ years mitigate some of the immediate threat of a real estate crash? I’ve read several articles where people have argued that even if real estate prices take a major hit, rental rates in much of Canada are not likely to fall (due to various forces beyond the scope of a blog comment).

    At least I got some confirmation that the numbers weren’t totally out of whack by a guy that has been in the game for awhile. Your returns won’t be duplicated for a little while I would think so kudos for buying when there was “blood in the streets”.



  14. […] with Teacher Man over at Young and Thrifty, who’s thinking of partnering with some friends to build a fourplex in Saskatoon. At the top of the real estate market. In a market that is ridiculously overvalued. I admire his […]



  15. Potato on August 18, 2013 at 6:41 pm

    Reality checks:

    Rent: Have you looked at comparable listings, is that reasonable actual rent (vs asking) for something outside the core? I’m not familiar with Sask, but aside from Toronto (London I’m most familiar with, Hamilton is similar), $1600 out of the central area would get you a detached 1000 sq ft (a quad-plex would be at a bit of a discount, say $1300-1400). Very important to also consider whether these rental rates include utilities or not. It’s best if you can submeter every unit and get the tenants to take responsibility for their own usage, but if the standard unit that you’re getting those estimates from includes utilities then you’ll either need to adjust your expectation down, or add in an estimated cost for utilities.

    I did a quick search on ViewIt and found a half-dozen 2-3 bdrm townhouses under $1400 (not including utilities). Again, no idea about the neighbourhoods, but they were all in the city. So let’s instead assume a more conservative $1300/mo for a quadplex outside of the city.

    Mortgage: forget the mortgage at this stage, usually you want to see what the cash yield will be, then worry about the financing (as that will give you more of an idea of your interest rate sensitivity).

    Building costs: your shop teacher friend said “it’s going to cost…” which is a red flag for me. If it’s not done yet, then those could be projected costs, and cost-overruns could make the final tally hugely more. The detail also isn’t there to tell whether he’s including any labour (if he’s building it, that may just be his material and specialized trades budget). It sounds like you’re looking to build about 4000 sq ft, and the ballpark number I heard for Sask was $200/sq ft for new construction (your ~$150/sq ft estimate is not totally out of that ballpark but a 25% cost-overrun could change things quite a bit — FYI a Regina modular housing estimate is $125/sq ft, so I wonder if a more custom and labour-intensive approach can come so close). If you don’t have ~$650k to pay for the expenses then you’ll need a construction loan, which will cost you more than a conventional mortgage.

    Vacancies: this should cover both actual vacancies as well as effective vacancies (where the tenant defaults and you’re not making money), as well as the added cost of holding a vacant unit (utilities plus transfer fees from the utilities companies), so 10% sounds like a good number to use even if the actual vacancy rate is a good deal lower.

    Maintenance: 1% is pretty reasonable for an owner-occupied house. A quad-plex will give you some efficiencies, but also keep in mind that you’ll have higher maintenance costs as a landlord (more painting/patching walls for turnover, and some small things that would be materials only as a homeowner would be service calls on a quadplex — or at least mentally account for the PITA factor if you’ll do it all yourselves anyway). Being newer means that there won’t be many costs for a few years, but just because you’re deferring them doesn’t mean they’re not accumulating.

    So, let’s revise the numbers:
    Income: $5,200/mo, $62,400 annually
    Expenses and allowances (annual; assuming no leverage yet):
    Taxes: $11,000
    Insurance: $3,600
    Vacancy allowance: $6,240
    Maintenance: $7,000
    Other transaction costs: to be embedded in value of structure.
    Management costs: PITA factor to be sucked up, accounting and legal assumed to be negligible.

    Annual projected gross income: $34,560
    Now assume that the property will indeed cost $650k, that’s a pre-tax 5.3% unlevered yield.
    If it costs closer to $750k, that’s a pre-tax 4.6% unlevered yield.

    That’s an awful lot of work for those kinds of yields. Now you can of course lever this up a lot more than you can a portfolio of REITs. Right now you can get a 5-year mortgage at 3%, or a 10-year at 3.9%. Of course, rates increasing is a risk, and you’re not going to get today’s mortgage rates for a property that won’t be built for another year or two, so let’s assume that the 10-year rate is closer to what you’ll be getting for the life of the investment.

    With your $150k down, you’ll make 5.3% ($7,950). On the mortgaged portion (assuming $650k cost), you’ll make 5.3% but pay the bank 3.9%, netting you $7,000 per year. In all, you’ll make almost 10% on your levered $150k investment (this is income not cash flow — the mortgage will also have to be amortized — also taxed fully at your marginal rates). Or 6.6% levered yield if your total cost is $750k.

    Of course, you can also see your interest rate sensitivity: if the place costs $650k in the end, you’re only expecting to make 5.3% on it. If rates get back up to the 5% range you’ll be sweating bullets. If it costs closer to $750k to build, you’ll be sacrificing goats or buffalo or whatever it is they do in Saskatchewan when rates cross the mid-4’s. You assumed 6% above because of rising rates, which would be even worse.

    So, a lot of risk and unaccounted-for PITA factors, without a whole lot of return prospects there. The biggest two questions are how accurate do you think your initial estimate of the cost to construct was, and how accurate do you think your rental rates were? Your initial estimates put you at an unlevered yield of 7.4%, which gives you a return as good or better than most REITs, and a fair bit of breathing room for levering up with interest rate increases. But if the costs are higher, the capital needed is higher, or the rental income lower, it rapidly starts looking worse.



  16. Teacher Man on August 19, 2013 at 12:01 am

    Thanks a lot for the super detailed reply HP!

    I’ll maybe just number my comments to make it easier to reply too. First, your main questions:

    1) Buildings costs: $200 a sq. ft. is a little high from what I’ve been hearing from less educated sources than my buddy. More like $165-$180 range, but let’s say $200 would be a maximum. My buddy was referencing the price he is charging all in with labour and everything (what he quoted and what was accepted – 10% overrun protection I believe). That fourplex is like 3km away from Sask border here in Manitoba, so I think the numbers are somewhat relevant. I also believe that building a fourplex would have to lower the price considerably since you’re economies of scale are different, and don’t forget the cost advantages we have with our tradespeople as well. Finally, I imagine we would chip and do some of the work ourselves. Neither of us are carpenters by any stretch, but we’ve each done a fair amount of smaller jobs like roofing, painting, putting in cabinets, etc., so doing the roofing for four buildings for example wouldn’t cost us anything but a bit of a sore back for a couple of days! Again, we’re definitely not about to starting doing the job ourselves, but there are some efficiencies there if we put our minds to it.

    2) Rental rates: Admittedly I may have been a slightly ambitious here when looking at the numbers. Here’s the think about the $1400 per month figure – I didn’t see any new buildings at that rate. There are lot of aesthetic advantages to a new house/unit, so I’m pretty confident that $1400 would be an absolute basement number, with $1500-$1600 probably the more likely range.

    3) Leverage – We would be looking to leverage most of the cost (since we’re young guys) and I would be a little nervous about exposure to interest rates going forward. The one silver lining here is that the tax deduction (including a probably cash-damming strategy) would make a lot of our income basically tax-free (which is good since if it goes into the 7-8% territory – which certainly isn’t impossible, we would be depending on appreciation of the asset for any ROI at all!).

    4) Great comparison look at levered vs non-levered rates of return, I hadn’t crunched the numbers in that way before.

    5) Do you manage rental properties HP? This was a great breakdown so I’m just curious.



  17. Potato on August 19, 2013 at 12:51 pm

    Well, the rental rate is one of your biggest sensitivities, so I’d do as much research there as is feasible first to be sure of it. Pose as tenants and view comparables first-hand if needed, or if you’re comfortable with deception and wasting a bit of people’s time, put up a listing for your hypothetical place and see what kind of responses you get at a few price points. If the initial construction and rental estimates are robust then it’s pretty decent.

    No, I don’t manage properties, just analyze. Maybe one day if the numbers ever make sense in Ontario.



  18. Teacher Man on August 19, 2013 at 1:44 pm

    Great Idea HP. Thanks again for the feedback and advice, I appreciate it.



  19. Julie Broad on August 27, 2013 at 5:01 pm

    Great post and comments. You have a super smart reader community here!
    Looks like you have a great grasp on the numbers and the Potato covered a few of my top concerns like utilities and repair costs adding up over time (awesome post Potato!!) but I wanted to mention a couple of other things:

    >> Location & Your Ideal Tenant – being in or near a city with great fundamentals isn’t enough. Where is it located specifically? We buy in a smallish city (Nanaimo) and there are still only 3 areas I will own in because I get max rents vs home value PLUS attract awesome tenants who STAY.

    Who is going to be your renter and does that property appeal to that specific tenant type? Families want something different than students. Seasonal workers want something different than seniors. If you are targeting young families (which make fabulous tenants generally – they stay for 2 or 3 years if their kids are in school) are they going to feel safe in that area, is it easy to get to school and work from there.

    >> Tenant Complaints / Issues – Is there laundry in each suite? What measures are being taken to reduce sound transfer between units? Where is parking for each unit? These are the things that cause tenant complaints and turn over. We’ve owned everything from single to sixplex and in six different cities in Canada. While it’s a generalization and not based on anything but past experience, four – six plex properties (the exception to this is when we owned in Toronto – but that is an exception because it’s so big and rents are so high) generally have higher tenant turnover and more tenant complaints if they are not very well thought out and well built.

    >> Tenant Turnover – when tenants move out, in order to attract other tenants of high quality, you may find yourself painting, putting up new blinds, fixing flooring or odds and ends, and I promise that your repair numbers are far too low to account for the things you’ll start improving probably 2 – 3 years in just to ensure you have wonderful people living there paying you the max amount of rent possible. Units get run down if you don’t stay on top of these things.

    >> Buying New – Buying new isn’t always the highest returns … there are advantages to it, like lower maintenance costs at first and a product that looks great on day one, but usually we find much better returns in homes that haven’t been updated that are in great established neighbourhoods.

    Hope this helps a bit! Good luck,
    Julie



  20. Teacher Man on August 27, 2013 at 8:16 pm

    Wow, this is awesome Julie. Thank you so much for taking the time to make this comment. We do have some great readers here at Y and T (sometimes makes me wonder who should be writing for who around here) and I love having the ability to bounce things off of people and have them poke holes in it (see the current 3-part series we’re running).

    You raise some great points that I have no experience in and to be honest hadn’t even considered. In regards to buying new, I think we would certainly be up for purchasing a property, but it’s doubtful any will come on the market from what we can tell. Certainly we would entertain the idea. Very informative to note that the repair numbers are likely to low when you consider “higher end” repair situations. Also, good to know about young families and ideal tenants.

    Thanks again, great to hear from someone with experience!



  21. Julie Broad on August 27, 2013 at 9:02 pm

    My pleasure – if you ever have real estate investing questions / issues please let me know. Happy to help.



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  23. Reg on September 21, 2013 at 8:11 am

    Hi Julie, I read your post and appreciate the comments you made. I live on Gabriola and my wife and I are looking for a duplex or triplex to live in and rent out part as a mortgage helper. We would want to keep our home on Gabriola as my wife’s parents live there. Im curious about what areas you would recommend buying or building in, in Nanaimo? My daughter will be likely attending VIU next year so we would like be somewhat close to that location. Is VIU area an area you would recommend?

    Thank you for your consideration.

    Reg



  24. Julie Broad on September 25, 2013 at 7:53 pm

    Hi Reg,
    It all depends the type of tenant you want to work with. VIU area is great for attracting students. Good, clean places will find a steady stream of waiting tenants. The challenge, of course, is turnover. Rarely do students stay longer than a year, if they stick around for summer. But the houses are more affordable in the VIU area than in many other areas that will get the same rents.

    It just depends what you’re willing to do and what you’re looking for. If your daughter is going to live in it while going to VIU I think that is a brilliant plan. Look around a lot though -some streets are FAR better than others. Spend time walking around, checking out open houses, visiting properties and just generally watching what happens in each little sub pocket for rentals, sales and who lives there.

    Good luck.
    Julie



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  26. Philip de Belle on March 11, 2015 at 4:41 pm

    My question here is in regards to vacancy rates at 10%. In your first year of operation if one unit remains unrented that becomes a 25% loss in a 4 plex. In the search for good tenants and the proper screening process this is a possibility. I would prefer to find a good tenant for 5 to ten years than find a new tenant evey year with damage repairs in between.Can you right off that 25% in the first year or are you obligated to take 10% vacancy rate in year one??



  27. 123ym on March 12, 2015 at 9:49 pm

    i live in saskatoon
    a 3 bedroom townhouse goes for 1500 a month rent in a good area
    i think the rent assumption of 1600 is too high
    just my too bits



  28. Kyle on March 14, 2015 at 11:47 am

    My guess is that rents would have come down a little since we published the article. Thanks for the comment 123ym. We haven’t proceeded with the project as of yet. Perhaps if things get tough on the construction industry and building costs come down substantially we’ll pull the trigger.



  29. Kyle on March 14, 2015 at 11:48 am

    Hi Phil. You’re certainly not obligated to take a vacancy rate, we just used that number after talking to several landlords who felt that over time the 10% figure was about right.



  30. Saskia Wijngaard on May 2, 2016 at 6:33 pm

    OYE!. 11,000 property taxes on a 500,000 property. Wot.
    3600. for insurance. That is just crazy.
    150,000 down. Nope. By law 20% so that is 100,000 down.
    I am a real estate agent who has created a new program Sell ‘n STAY which invests in single family homes occupied by seniors and they pay you rent. Our ROI comes in at 24% – 31% and its like haveing a property manager on site. Seriously 11,000 for Property tax.. s/b 3500 for a 500,000 dollar place.



  31. Kyle on May 4, 2016 at 8:57 am

    Interesting proposal Saskia!



  32. roy on July 16, 2016 at 3:03 pm

    When was this article written? Ppl have been calling for a RE correction for almost a decade now



  33. Eric on July 17, 2016 at 6:44 pm

    Why is the amount of principal payed off every year not applied as profit?



  34. Kyle on July 17, 2016 at 11:09 pm

    You’re telling me it’s not happening any day Roy? Look at Saskatoon’s RE numbers this year.



  35. Gretz on January 10, 2017 at 7:07 pm

    Hi. As a Real Estate Investor myself, I from time to time think about building 4 pack condo buildings. I do live in Saskatoon and tend to agree with some of the other people commenting that it isn’t the best decision to invest in a peak market.
    I personally have never bought or built at the peak of thr market.
    Some of the best investments I ever made were in the U.S. For example, the amount you are looking to spend. I own 5 very nice rental properties that were purchased for about the 600 000 CAD figure that you are looking at spending.
    They each rent for about 1300 each. That is $6500 per month in U.S. dollars a month on rent.
    History speaking let me say the Can dolar is worth 80 cents on average well convert that into Can every month???
    Obv I pay for all of those same expenses that you mentioned including property management and so on. And cross border income tax filing. All in all I the math adds up to be alot better than myself ever investing in a 4 pack or 4 pkex style condo building in Saskatoon or Canada.
    It would not be a terrible investment but there are sometimes better investments out there.



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