Stacked Town House - Scarborough, ON

[SanjivSheth]

Hi:
At present I am considering making an investment in a stacked town-home which I have seen in the Scarborough, ON region. The town-home is <5 years in age and in terms of curb appeal; well they are fairly attractive in my opinion for young starters - modern living, close to amenities, public transport, etc

The numbers appear to work and are (just) in my favour and are as follows (assuming 20% down):

Purchase Price - $140,000
Mortgage - $112,000

Rent - $950.00 (Estimated)
Mortgage - $460.00
Taxes - $150.00
Condo Mgmt Fees - $150.00
Vacacy (@5%) - $50
R&R (@5%) - $50
Water Heater - $50

Est Cashflow = $40 per month

Any opinions on the numbers i.e. does the investment make sense?
And waht about buying a stacked town-home which is not freehold?
And finally, how about investing in Scarborough? Particular areas to stay away from?

Appreciate the assistance!

 

[RandyDalton]

QUOTE (EffectiveResume @ Jun 10 2009, 11:50 PM) Hi:
At present I am considering making an investment in a stacked town-home which I have seen in the Scarborough, ON region. The town-home is <5 years in age and in terms of curb appeal; well they are fairly attractive in my opinion for young starters - modern living, close to amenities, public transport, etc

The numbers appear to work and are (just) in my favour and are as follows (assuming 20% down):

Purchase Price - $140,000
Mortgage - $112,000

Rent - $950.00 (Estimated)
Mortgage - $460.00
Taxes - $150.00
Condo Mgmt Fees - $150.00
Vacacy (@5%) - $50
R&R (@5%) - $50
Water Heater - $50

Est Cashflow = $40 per month

Any opinions on the numbers i.e. does the investment make sense?
And waht about buying a stacked town-home which is not freehold?
And finally, how about investing in Scarborough? Particular areas to stay away from?

Appreciate the assistance!

Have you considered your Property Management fees? If you factor this in I think you are in a negative cash flow position, albeit barely. However are you sure about the rents. Condos in our area, Hamilton, rent for 1250 to 1400 monthly and could give you the boost in revenue that you need. Also consider things like the new LRT going in. Any chance this is nearby as you will see a definite appreciation in the next 5-10 years.

Regards...Randy D.

 

[invst4profit]

With a rent of $1400 it is a fair deal but at $950 it will have zero to negative cash flow.

 

[housingrental]

Effective Resume - This deal isn`t terrible but not great and I`d pass. In Waterloo currently you can buy a place for 155k with $1500 rent with tenants paying utilities. I`d rather be in Waterloo than Scarborough. Re "Any opinions on the numbers i.e. does the investment make sense?"
1) You`ll be cash flow negative in a few years if interest rates are higher which is probable.
2) Your are cash flow negative immediately when you factor in property management fees. If your self managing and not factoring in your time your effectively donating your time to make the property appear profitable.

Re " And waht about buying a stacked town-home which is not freehold? " I don`t like them - but good be fine at what price?

And finally, how about investing in Scarborough? Particular areas to stay away from? All except parts of guildwood

Nothing wrong with Scarborough some cheap houses in livable areas with big mature lots is what I`d guess will outperform long term.