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  • 1. Property Investment Thoughts as presented to BNI Northwest Success Prepared and presented by Dale Williams, Broker
  • 2. Reasons to Invest in Property • Financial Investment • Satisfaction of Ownership Favourable Market Low Interest Rates Inflation protection Forced Savings Need somewhere to live Need a place to operate business
  • 3. How Not to Buy Real Estate• Want to do a deal - bad. As Russell Peters says, “Somebody’s gonna get hurt real bad!”• Do it because it’s the kind of investment many others are making.• Fall in love with a property.• If you think you have Money to burn• Succumb to Pressure
  • 4. Reasons to Own• Reduce or Control Occupancy Costs.• Build Equity• Direct Income Generation• Short term Fluctuations in Value not a major concern• Inflation protection
  • 5. Additional benefits from Commercial properties• Absolute Net Revenue from Commercial property – Tenants pay your taxes, insurance, maintenance costs and all utilities• Long term leases – Leases can be 5 to 10 years with built in rent increases and options.
  • 6. 08/15/2012 7113 114A Street T8W 0G8 Page 1 of 1MLS® #: L072245 Map #: Status: Active DOM: 37 Price: $328,000 Legal Desc: 0722940 13 33 Lot 33 Blk 13 Zoning: Plan 072-2940 Area: City Of Grande Prairie Sub-Dist: Pinnacle Ridge PKA: Road: Public Lot Dim: Acres: Irreg: Yes Sqft: 1,102 Occupancy: Tenant Age: 4 Age Status: Elem Schl: Sec Schl: Rental: Yes DOF: No Disclosure Sign: Yes Matrim: Assemnt: Imprvmnts: Tax Roll#: Tax Year: 2012 Taxes: 3,595.00 List Date: 07/09/2012 Close Date: Poss Date: Immed: No Nego: Yes Cond: Days: Hours: Condo Fees:Overview: Wow, Investor Alert! This home is a city approved legal up/down suited property with 3 Bedrooms up and 2 Bedrooms down. Home features separate furnaces, separate laundry with completely separate entrance makes this the perfect place to live up and rent down, or rent out both and keep it as a cash flow positive investment. Home is on a large lot, lots of space for a garage or RV parking. Call your realtor® today.Inclusions: All appliances and Window Coverings in AS/IS ConditionType: Duplex Architecture: Bi-Level Attachment: DetachedStories/Lvls: 1 Bldg Color: Side of Road:Exterior: Vinyl Landscape: Landscaped Roof: Asphalt ShingleFence: No Fence Water: MunicipalHeating: Natural Gas Sewer: MunicipalServices: Bus Service, Cable, Electricity, Natural gas, Telephone Rent Equip:Beds (U/D): 3/2 Baths (F/H): 2/0 Flooring: Carpet, LinoleumFoundation: Concrete Basement: Full Basement Dev: SuiteGarage: No G/P Details: Gravel Parking Pad at rear of home.Driveway: Gravel GrgType: NoneFeatures: Inlaw/Basement Suite, See Remarks
  • 7. Quick Analysis for Residential Investment Property• Purchase Price $328,000• Down Payment 25% $82000• Mortgaged Principal $246,000• Mortgage Interest 5%• Amortization (years) 25 Monthly Annual• Revenue $2400 $28,800• Expenses• Mortgage $1430.75 $17,169• Taxes $4078• Insurance $500• Maintenance $1000• Property Mgmt. $2880• Total Annual Expenses $25,627• Net Operating Income $3173• Return on Investment 3.9%
  • 8. Quick Analysis for Residential Investment Property Up-Down Duplex Standard Financing w/CMHC InsurancePurchase Price $328,000 $328,000Down Payment 25% $82,000 5% $16,400Principal $246,000 $311,600CMHC Fee 2.75% $8,569Mortgaged Principal $246,000 $320,169Mortgage Terms - Percentage 5% 5% Amortization (years) 25 25Tax Rate (2012) 12.4325 Monthly AnnualRevenue 2600 $31,200 $31,200Expenses Mortgage $1,431 $17,169 $1,862 $22,345 Taxes $4,078 $4,078 Insurance $500 $500 Maintenance $1,000 $1,000 Property Mgmt. $3,120 $3,120 Total Annual Expenses $25,867 $31,043Net Operating Income $5,333 $157Return on Investment 6.5% 1.0%
  • 9. Factors and Considerations • Vacancy • Operating Choices • Mortgage Rates • Market considerations • Exit Strategies • Diversified Risk • Fractional Ownership