Ottawa Real Estate Blog

Nov. 5, 2018

4 Vanier Income Properties, sold Oct. 2018

Usually we profile One multi-Family building that sold, this month we are taking a look at 4 properties, all from Vanier

The table below gives you all of the financial information from a couple of 6-Plex's as well as a 9 unit and a 10 unit Multi-Family building. We recently used these to do a CMA for a client, so we may as well show you how well these performed.

We always use a 35% downpayment, and for the examples below we are using a commercial mortgage rate of 5.6% as all were more that 5 apartments.

4 Income Properties sold Ovt 2018 in Vanier

From the examples above, you can see that only one building provided a positive cash-flow and two of the properties returned negative returns-on-investment.

Two buildings sold for under their asking price, one sold for full asking price and the final one sold for over $20,000 more than it was listed for. CAP Rates for all of them were above 4%.

Have a look at our listings of Multi-Family Properties

Nov. 1, 2018

Tenant use of Cannabis in Ontario

tenant use of cannabis in their apartment

This article covers a couple of recent changes that will affect owners and purchasers of income properties.

As you are probably aware, the province of Ontario has recently mandated the use of their leases for all landlords and tenants. Failure to provide the lease, if requested by a tenant, will result in you having to provide one month free rent. You can access the lease in the link below.

Additionally, I have been asked if the lease specifically addresses cannabis. The Ontario Real Estate Association has just provided us with clauses that a landlord can add to a lease, regarding the growing and use of weed in your building.

See the 2 New Clauses below:

The first is in regards to dealing/harvesting:

"The Tenant and any occupants of the premises and, including without limitation, any visitors, guests and business invitees shall not sell, distribute, cultivate, propagate or harvest any cannabis plants within the meaning of the Cannabis Act, S.C. 2018 c. 16 and the Cannabis Act, 2017, S.O. 2017, c. 26 as amended from time to time, anywhere in or upon the premises rented by the Tenant, the building where Tenant's premises are located or in any of the common areas or adjoining grounds of such building."

The second is regarding smoking:

"The Tenant and any occupants of the premises and, including without limitation, any visitors, guests and business invitees shall not smoke anywhere in or upon the premises rented by the Tenant, the building where Tenant's premises are located or in any of the common areas or adjoining grounds of such building, except for the designated smoking area(s) noted below:

For purposes of this provision, the term "smoke" or "smoking" means to inhale, exhale, burn or have control over a lighted cigarette, lighted cannabis cigarette, cigar, pipe, hookah pipe or other lighted smoking implement designed to burn tobacco or any other substance, including without limitation, cannabis as defined in the Cannabis Act, SC 2018 c16 as amended from time to time for the purpose of inhaling or tasting of its emission. Contravention of this provision shall be deemed to be a material breach of the lease. "

If you're looking to buy any type if Investment Property in the area, work with an Agent who knows all the rules!

Have a look at our inventory of Income Properties for sale

Oct. 1, 2018

Overbrook Triplex sold September 2018

Tri-Plex Property sold in September, in Overbrook

This property is a Triplex that was sold in September, it was listed at $769,900 and sold for $760,000 in just 26 days. This building was made up of a 1 bedroom apartment and Two 2 Bedroom Apartments, both of the 2 bedrooms were vacant at the time of sale. This property was Fire Retrofitted.

Below is the table where you can see all of the numbers, and at the bottom we give you the Return on Investment that the buyer will get based on a 35% down-payment.

Overbrook Triplex, Sold September 2018
Listed Price $769,900

Selling Price $760,000
Scheduled Rental Income (SRI) $52,800
Effective Rental Income (ERI) $50,688
Total Operating Expenses (TOE) $15,594
Net Operating Income (NOI) $35,094
Capitalization Rate (CAP) 4.6%
Operating Expense Ratio (OER) 31%
Sales Price X Net Income 22%
35% Downpayment $266,000
Mortgage (@ 3.5%) $494,000
Annual Debt Service (mortgage payments) $29,597
Cash Flow $5,497
Return on Investment (ROI) 2%

This income property had some updates etc. in 2018, including: Updated Windows,Kitchen, Bathrooms, Electrical, Fresh Paint, Stainless Steel Appliances and Hardwood Floors.

When we look at the numbers, this building actually had a positive cash flow with 35% down, using a mortgage rate of 3.5%. At the end of the day, this buyer saw a Cap Rate of 4.6%, a cash flow of $5,497 and a Return On Investment of 2%.

Each tenant paid for their own Hydro and Hot Water Tank Rental cost

Browse our selection of Multi-Family Listings currently for sale.

Sept. 7, 2018

Centretown 6 Unit sold August 2018

This Six Unit Income Property sold in August, in Centretown

Have a look at the table below for all of the financial info on this 6-Plex from Centretown or watch the video where Pat will go through all of the numbers and let you know if they are good or bad.

Below is the table where you can see all of the numbers, and at the bottom we give you this buildings Return on Investment as well as the cash flow based on Two different mortgage rates.

Centretown 6 Unit Building, Sold August 2018
Listed Price $1,295,000

Selling Price $1,240,000
Scheduled Rental Income (SRI) $90,220
Effective Rental Income (ERI) $86,611
Total Operating Expenses (TOE) $31,089
Net Operating Income (NOI) $55,522
Capitalization Rate (CAP) 4.5%
Operating Expense Ratio (OER) 36%
Sales Price X Net Income 22%
35% Downpayment $434,000
Mortgage (@ 5.5%) $806,000
Annual Debt Service (mortgage payments) $59,037
Cash Flow -$3,515
Return on Investment (ROI) -0.8%

Looking at the numbers based on a rate of 5.5%, which is common for larger income properties, this buyer would be taking a loss of $3500 per year, which is a -0.8% return on his initial investment of $434,000.

If this buyer could shop around and find a mortgage at 3,5%, which you can get on smaller buildings and some lenders will do this on larger buildings, this would change the whole scenario. The return on investment goes up to 1.7% and the buyer makes $7200 per year.

Check out some of the Multi-Family Listings we currently have for sale.

Aug. 4, 2018

Westboro 4 Unit Sold in July 2018

Fourplex sold in July, it was located in the Westboro Neighbourhood

We have seen a number of multi unit residential buildings sell in 2018 with negative cash flows. This is based on a 35% down-payment.

In the early to mid 2000's an astute investor could purchase a building with a 20% down-payment and realize a positive cash flow. That changed almost overnight in 2008/09 when the equities market took a dive. Investors who previously never touched real estate now flocked to it in droves. That factor combined with historically low interest rates caused the price of multi unit buildings to jump in value as investors snapped them up.

How much would you be willing to pay for a multi unit building to achieve a positive cash flow?...

… 35%? 45%? Or is cash flow secondary in your criteria. This month take a look at the financials for another negative cash flow property.

Below is the table showing you all of the numbers on this sale, and it looks like the buyer is taking a loss and there could be a reason for that, like the buyer actually moved into One of the units as a live-in owner.

 

Westboro 4 Unit Building, Sold July 2018
Listed Price $950,000

Selling Price $929,000
Scheduled Rental Income (SRI) $49,300
Effective Rental Income (ERI) $47,328
Total Operating Expenses (TOE) $20,465
Net Operating Income (NOI) $26,863
Capitalization Rate (CAP) 2.9%
Operating Expense Ratio (OER) 43%
Sales Price X Net Income 34.6%
35% Downpayment $325,150
Mortgage (@ 5.5%) $603,850
Annual Debt Service (mortgage payments) $36,178
Cash Flow -$9,315
Return on Investment (ROI) -2.9%

Have a look at all of the Multi-Family Listings on our site, or get in touch if you want to buy or sell your building.

July 23, 2018

1081 Ambleside Drive # 2009, Ottawa

1 bedroom condominium with great views for sale at 1081 Ambleside Drive, price is $199,900

In recent years this apartment has been updated with windows and hardwood throughout the foyer, living & dining areas & bedroom. Dining room light fixture with ceiling fan. Ceramic floor in the kitchen with clean white cabinetry and large opening to the living room, allows natural light to flood into it from the balcony.

Balcony access via sliding glass door from living room. Perhaps one of the best views in Ottawa. NOTE condo fees ($625/mo) pay for all utilities + cable!! Building has indoor pool, guest suites, workout room, sauna & more. This one bed, one bath apartment faces northwest with spectacular views of the Ottawa River & Gatineau Hills. View the Britannia Yacht Club, Mud Lake in Britannia Conservation area & famous Deschenes Rapids.

Directions: Richmond Rd to New Orchard or McEwen to Ambleside. Lots of visitors parking beside building.

Condo Fee Includes: Building Insurance, Amenities, Cable TV, Caretaker, Heat, Hydro, Management Fee, Recreation Facilities, Water/Sewer

Condo Amenities: Cable TV, Exercise Centre, Guest Suite, Indoor Pool, Party Room, Sauna, Workshop

Site Influences: Adult Oriented, Balcony, Exercise Room, Indoor Pool, Lakeview, Mountainview, River views

Neighbourhood Influences: Public Transit Nearby, Recreation Nearby, Shopping Nearby, Water Nearby

Taxes/Year: $2,185.00/2018

Want to schedule a viewing at 1081 Ambleside, Apartment 2009?

Patrick at 613-788-2590 or Patrick@AgentInOttawa.com

View the surrounding area using this interactive Google Map

Related Page: Check out more condos currently available at 1081 Ambleside

Posted in New Listings, Woodroffe
July 9, 2018

Centretown 7 Unit Sold in June 2018

We found a 7 Unit apartment building that sold in June and below are the financials on it.

There was a mix of bachelor apartments as well as 1, 2 and 3 bedroom apartments. It took 65 days to sell and it sold for $44,000 under the asking price.

This building had One Apartment that was said to suitable as an Owner Occupant Apartment, and maybe that is why this buyer bought the building, to live-in. The Return on Investment here is negative.

Centretown 7 Unit Building, Sold June 2018
Listed Price $1,469,000

Selling Price $1,425,000
Scheduled Rental Income (SRI) $100,152
Effective Rental Income (ERI) $96,146
Total Operating Expenses (TOE) $36,496
Net Operating Income (NOI) $59,650
Capitalization Rate (CAP) 4.2%
Operating Expense Ratio (OER) 38%
Sales Price X Net Income 24
35% Downpayment $498,750
Mortgage (@ 5.5%) $926,250
Annual Debt Service (mortgage payments) $67,845
Cash Flow - $8,195
Return on Investment (ROI) - 1.6%

At first glance in the table above, you can see that this buyer would be having an $8000 loss in the first year if they had a 35% downpayment. This property did have a 4.2% Cap Rate.

Looking to buy, have a look at all our Income Properties for sale

July 6, 2018

58 Sundragon Way, Barrhaven, Ottawa

House is now SOLD

Our newest listing will be at 58 Sundragon Way in the Half Moon Bay neighbourhood in Barrhaven

Priced at $475,000

58 Sundragon Way is a Wonderful family home with 3 bedrooms & 2.5 baths with one being an ensuite. This Marigold Corner model is 1,710 square feet according to Mattamy plans. It feels even larger with an open concept plan and abundance of windows on the main floor.

Watch the video below for Interior Photos

Talk to guests or keep kids in view when making dinner. Well designed with a mudroom, closet and powder room off of the foyer. Upgraded with hardwood through the main floor. Upstairs features a large open family room. Ensuite with two sinks.

Basement has a partially finished recreation room with flooring and drywall, which just needs to have mud & tape + ceiling for added living space. The hard work's been done!!

Note the 2 car garage that many larger area homes do not have, with direct access to the house. This HUGE corner lot is 3,584 square feet according to Geowarehouse. Compare that to the competition!

The large yard is fully fenced and quite private. Did you notice the large front porch for that country estate vibe. Inquire about the many local schools.

DIRECTIONS: South on Greenbank, west on Dundonald. Left at Andre Audet. Left at Soldats Riendeau to Sundragon Way.

Want to see this house, Patrick@AgentInOttawa.com or 613-788-2590

Take a quick tour of Sundragon Way or the immediate neighbourhood using the interactive street map below

June 11, 2018

142 Huntersfield Drive, Ottawa

New Listing in Greenboro/Hunt Club Park, this is a 2 Storey detached house with 3 beds & 4 baths, priced at $399,900

Coming to the Ottawa MLS on Friday 15th June 2018

142 Huntersfield Drive, Greenboro, Ottawa

This new listing will be going live on Friday 15th June, get in touch for an early showing!

  • Directions: Hunt Club to Pike Street then west on Huntersfield.
  • Lot size: 33.46 ' x 104.98

One of the nicest locations in Greenboro backing on to Bruff Park and kilometers of walking paths. Terrific family home with 4 baths, 3 bedrooms, fully finished basement, and oversized garage.

Watch Video Tour of 142 Huntersfield

In 2016 a red cedar fence installed, basement reno'd with additional room and 3 piece bath added. Dishwasher & garage door 2016. Furnace, AC, believed to be 2015, roof 2010. This is a bright home with large windows. The dining room which has a bay window and the kitchen at the back, over look the park. Kitchen with glass doors to a wood deck & stairs down to the back yard and a patio.

Some recent touch up painting makes this home move in ready. Note 4 appliances are negotiable. Basement den currently used as a 4th bedroom.

Use the Interactive Map below to have a look up and down Huntersfield Drive or take a tour of the neighbourhood.

If you want to live in this neighbourhood, have a look at all the homes that are currently available in the Greenboro, Hunt Club and South Keys Neighbourhoods

June 7, 2018

Vanier 5 Unit Sold in May 2018

The financials we are looking at for May is on the sale of a 5 Unit Apartment Building in the Vanier Neighbourhood

This building took 125 days to sell and it sold for $790,000 which is $10,000 below the listed price. It was Fire Retrofit and had 6 parking spaces. It had Apartments with 1 bed and a den as well as 2 bedroom apartments.

Below you can see all of the numbers that calculate whether this buyer makes any money on this building, and at the end of the day, he does make a return on investment here of 2.74%, very acceptable!

Vanier 5 Unit Building, Sold May 2018
Listed Price $799,900

Selling Price $790,000
Scheduled Rental Income (SRI) $64,620
Effective Rental Income (ERI) $62,035
Total Operating Expenses (TOE) $23,672
Net Operating Income (NOI) $38,363
Capitalization Rate (CAP) 4.9%
Operating Expense Ratio (OER) 38%
Sales Price X Net Income 20.6
35% Downpayment $276,500
Mortgage (@ 3.8%) $513,500
Annual Debt Service (mortgage payments) $30,765
Cash Flow $7,598
Return on Investment (ROI) 2.74%

From the table above, you can see that this buyer has a positive cash flow of $7598 per year on this property, with a 35% downpayment and the mortgage rate assumed here was 3.5%.

Are you looking to buy, check out a selection of Income Property for Sale