Property Assesment Query

10 Replies

Hello Investors,

I am a newbie from Canada and have just started looking for properties. I have came around one multifamily property with 4 beds. Can you guys please help me in doing assessment to this property if I should buy it or not keeping in mind Canadian market.

Selling price: 279,000

Rental Income: 2700 x 12 = 32400

Expenses (Utilities paid by landlord): 9018

Vacancy, Capex, Repair & maintenance (assumed 5% each): 4860

Mortgage (5% Down, 4% CMHC insurance, 3.04% int, 5 years fixed, 25 amr): 1310 x 12 = 15720

Cashflow (yearly): 2802

Experts,

Any suggestions?

Originally posted by @Christopher Phillips :

@Devang Teewar

Do you plan to occupy one of the units? If no, you probably won't be able to get a loan with 5% down.

 No I was looking for complete house. I think first property can be bought with 5% down ?

@Devang Teewar

No. 5% down would be for owner occupants in Canada.

If you're looking to buy as a non-owner occupied investment in Canada, your minimum down payment would be 20%.

@Devang Teewar

You can occupy one unit and then consider it a primary residence. That would allow you to go with a lower down payment, which will depend on the number of units. 5% is usually 1-2 units.

Otherwise, you would need to come up with 20%.

Originally posted by @Christopher Phillips :

Devang Teewar

You can occupy one unit and then consider it a primary residence. That would allow you to go with a lower down payment, which will depend on the number of units. 5% is usually 1-2 units.

Otherwise, you would need to come up with 20%.

 Thanks Christopher :) 

Originally posted by @Christopher Phillips :

Devang Teewar

You can occupy one unit and then consider it a primary residence. That would allow you to go with a lower down payment, which will depend on the number of units. 5% is usually 1-2 units.

Otherwise, you would need to come up with 20%.

For insured, high-ratio mortgages on owner occupied residential properties in Canada, the maximum LTV is 95% on SFRs and duplexes and 90% on triplexes and quadriplexes.

For a conventional, residential mortgage the LTV must be "less than or equal to" 80%.

I suggest 8.5% vacancy minimum. 10% repair/ maint unless this is completely renovated in every way. And you’re gonna need 20% down I suspect. Utilities look high to me.

Thank you guys, I had a look at the property yesterday and it is renovated recently with new windows and fire safety and city audit done just recently but overall the house looks creepy! Neighborhood is not promising and have high potential to get the wrong tenant. I am letting it go for now! As this one was my first property viewing, learning not to attach my feelings to overlook other cons.

Property Hunt is ON though!

The best part about real estate investing is that you can be completely emotionless. If the number work, it’s a buy, if they don’t, next bus comes in 15 minutes.

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