Have Money, Seek Good Long Term Investment for Retirement

ConscientiousInvestor

New Forum Member
Registered
Hi All!

I am seeking investment ideas that could meet or surpass an investment property that I already have. It is a rented property as follows:

1. Valued at $800,000 in Victoria

2. Mortgage of $450,000

3. Payments of $2000/month.

4. Rental income $4000/month

5. Annual maintenance and taxes cost about $4500 but this will increase (ten years left in roof).

This is a good investment property. I own the title however am only part owner of the building, and would like to find an investment property that matches this economically but that I can own entirely myself. The closer to Victoria the better.

Any suggestions?
 

CorySperle

Senior Forum Member
REIN Member
Hello. What is your equity stake in the building (cash investment), and actual yield (cash on cash return and ROI after amortization?). What are your retirement goals? High cash yield with little to no upside potential, low cash flow with higher appreciation or a bit of both?
 

Thomas Beyer

Senior Forum Member
REIN Member
Unclear what cap rate this is ie what expenses in your short list of numbers is included or excluded. Prop mgmt? R&M?

Smaller cities in BC might have more upside, as Victoria like Vancouver area is quite pricey already. Say any asset here
Nanaimo
Comox/Courtney
Campbell River
Sechelt
Gibsons
Chilliwack
Oliver
Penticton
Lake Land
Vernon
Kamloops
Cranbrook

But a rental property in S-Vancouver Island will do well too.
 

ConscientiousInvestor

New Forum Member
Registered
Hello. What is your equity stake in the building (cash investment), and actual yield (cash on cash return and ROI after amortization?). What are your retirement goals? High cash yield with little to no upside potential, low cash flow with higher appreciation or a bit of both?

Hi Corey. So my equity stake is $126,400 based on the original downpayment. Full disclosure my family and I live in the property and the $4000 rent was professionally estimated several years ago at time of purchase. To clarify, I don't need an investment property to retire in a couple of decades but it is a "bonus" to diversify my portfolio until that time you see. Most importantly it should have the equity to pay off a new primary residence in about 8 years, assuming 5% property value increase per year until then (a big assumption I know). Mainly it's FOMO-don't want to sell a great investment without one of at least equal value.
 

ConscientiousInvestor

New Forum Member
Registered
Unclear what cap rate this is ie what expenses in your short list of numbers is included or excluded. Prop mgmt? R&M?

Smaller cities in BC might have more upside, as Victoria like Vancouver area is quite pricey already. Say any asset here
Nanaimo
Comox/Courtney
Campbell River
Sechelt
Gibsons
Chilliwack
Oliver
Penticton
Lake Land
Vernon
Kamloops
Cranbrook

But a rental property in S-Vancouver Island will do well too.

Hi Thomas. I've tried to include everything in that short list of numbers, so utilities, maintenance, internal and structural insurance, and city taxes. Thank you for those tips! Are you confident those areas are appreciating more quickly than Victoria? After what happened to oil and Alberta real estate a few years ago, I stopped considering appreciation as a reliable way of investing, and prefer to go with the price cap, the property costs to rental income ratio. But I am staying open minded.
 

Thomas Beyer

Senior Forum Member
REIN Member
Nothing in life is certain except death and taxes.

There’s only probabilities fir everything else.


Sent from my iPhone using myREINspace
 

Matt Crowley

Senior Forum Member
Registered
I wouldn't buy this as an investment property. You seem to be missing your operating expenses?

per month
rent $4000
OE $1500
R&M $375
NOI $2125

implied cap rate (2125*12)/800,000= 3.2%

less debt @2% $1920
CF (month) $204

Not very exciting in my view

As Cory said, you need to look at your cost basis in the property if you sell as it is your personal residence. If you have a large gain, the after tax gains you make may make this look better.
 
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