All Forum Posts by: Lucas F.
Lucas F. has started 1 posts and replied 6 times.
Post: Investing in Northern Ontario?
- Investor
- SSM, ON
- Posts 6
- Votes 0
Hi Manvir,
I currently live and invest in Sault Ste. Marie. Kellan P. is accurate in identifying the volatility and dependence on one major industry. Below I have tried to illustrate a few positives and negatives:
Positives:
-Properties are reasonably priced and well below the average for Ontario.
-The majority of properties will cash flow with current market rents.
- Vacancy rate is favorable, although it has slowly increased over the past couple years.
Negatives:
- Property taxes
-Reliance on one primary industry
-Aging population above the average
-Small decline in population
I do see future potential in a city like Sault Ste. Marie (speculation) as it is a boarder city and could be utilized as a central economic hub for transportation, tourism, ect. The history shows a cyclical market with ups and downs reliant on our steel producer. Hope this helps.
Originally posted by @Brent Coombs:
@Lucas F., you already have your successful benchmark. Why lower it?...
A well located 4 Plex will cost approx 100,000 per unit here on average. Newer built could command close to 140,000 per unit. Student rentals have great cash flow, but no PM will touch them, the turn over rates are yearly, and upkeep and maitenence costs are high. My population is about 75,000 with the average age being high 40's. I believe in the years to come apartments will be in higher demand. I'm just on the fence due to the cash flow. The mortgage will pay down about 7,500 in the first year.
Originally posted by @Scott Dixon:
Hey @Lucas F.
From taking a quick look at your numbers I would say "not worth it." Your PITI looks to be around $2060/month leaving you with only $640 per month without including anything else (vacancy, utilities, repairs, supplies, property management, and cap ex). At the end of the day this one would be a wash or actually you would be paying to take care of the place.
Best of Luck,
Scott Dixon
Thanks for the reply Scott. The tenants pay their own utilities and the property is located 2 minutes from where I live in a b+ neighbourhood. I would manage the property myself. Rents are modest for the area and would probably rise over time. Would this make it worth the investment?
Mortgage- 1,500 per month at 3.10%, 25 year amortization.
Hello,
I own 3 student rentals and have since decided to pursue another avenue in investing. I am considering putting in an offer on a 4-plex. I realize the numbers don't appear to be as rewarding as student rentals, but is it worth it?
Purchase Price: 380,000
Gross monthly income: 2,700
Utilities: Tenants Pay
Property Taxes: 400 a month
Insurance: 160 a month
Downpayment- 20% (76,000)
Closing Costs- 2,500
The apartment is in a good location close to my principle residence, but do the numbers work well, or are they too low?