4 Unit Building in Centretown Financials & ROI

Posted by George Bradie on Friday, October 6th, 2017 at 7:45pm.

See the Cap Rate, Cash-Flow & ROI on this Recent sale of a Multi-Family Building near downtown

This recent sale of a 4 Unit Building will give you a good idea of what to expect if you're looking to buy a smaller income property in the downtown areas of Ottawa. This sale was in the centretown and Golden Triangle Neighbourhood near the Canal.

This Listing sold for over the asking price and we suspect that there were multiple offers, as we've seen in recent months. Good Income Properties are selling within the first few days of hitting the market and some for well over the listed price.

Carlington 4 Unit Building, Sold Sept. 2017
Listed Price $739,900

Selling Price $750,000
Scheduled Rental Income (SRI) $46,140
Effective Rental Income (ERI) $44,294
Total Operating Expenses (TOE) $19,924
Net Operating Income (NOI) $24,370
Capitalization Rate (CAP) 3.2%
Operating Expense Ratio (OER) 45%
Sales Price X Net Income 31
35% Downpayment $262,500
Mortgage (@ 3.25%) $487,500
Annual Debt Service (mortgage payments) $28,596
Cash Flow -$4,226
Return on Investment (ROI) -1.6%

Some numbers to take note of are the Operating Expense Ratio, which was 45% on this building, which we consider to be quite high, and at the end of the day, the purchaser here would have a negative cash flow of over $4000 per year after putting 35% down.

This building sold in 3 days, if you are looking to buy an Income or Investment Property anywhere in the Ottawa area, get in touch and we'll send the best properties to you as soon as they hit the market.

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