Real Estate Blog - Ottawa

Financial analysis from the sale of this 21-Unit Multifamily

This  property is located in Central Ottawa, with 21 Bachelor units. The property was listed for $3,800,000 and sold for $3,700,000.

• Scheduled Rental Income was $193,331
• Effective Rental Income was $187,531
• Operating expenses of $72,754
• Total Operating Expenses, with 10% for maintenance/management $91,507
• Net operating income of $96,024
• Cap Rate was 2.60%
• Operating Expense Ratio was 48.8%
• Sold for 20 times the Gross Income
• Sold for 39 times the Net Income

With a 67% down payment of $2,479,000, this leaves a mortgage of $1,221,000. At a 6% rate, amortized over 25 years, the monthly mortgage payment would be $7,812, for an Annual Debt Service of $93,744 (this is the annual mortgage payment).

The final cash flow on this building was $2,280 and the ROI (return on investment) was 0.09%.

Compare house prices and sales, see how they've changed in Orleans Neighbourhoods throughout 2023.

These stats cover the last 3 months ending November 26, 2023 compared to the same period in 2022.

• Most Sales: Fallingbrook/Pineridge and area saw 43 homes sell
• Highest Average Selling Prices: Cardinal Creek/Camelot at $879,609
• Largest Price Increases: 14.1% in Bradley Estates
• Fastest Sales: Orleans Village sold on average in 20 days

Highest and Lowest Single Home Sale in Orleans

• Highest Selling Price: $1,835,000 for a Detached Bungalow, 4-bed, 4-bath home in Chapel Hill
• Lowest Selling Price: $270,000 for a Condo Apt. 2-Bed, 2-Bath home in Orleans Wood

Notable statistics for Orleans Neighbourhoods

Should I buy Real Estate or Invest in the Stock Market.

Should I invest in real estate or should I invest in the Stock Market?  Watch the video which gives the upside as well as the downside of buying stocks or real estate.

Use the time stamps on the video to fast forward to the part you want.

Property Ownership Pros

• 1. Sale of a principal residence is not taxed when selling.
• 2. Purchased on margin. - You don’t pay 100% of the value of the property. $600,000 house increases in value by 10% = $660,000. But if you had a down payment of 10% = $60,000, you have doubled your investment.
• 3. Create equity as every mortgage payment pays down the principal.
• 4. Create equity as the market increases.
• 5. Forced savings. - Many people are incapable of saving money. Spend on restaurants, trips, toys.
• 6. Unlimited ability to buy any type of property for any purpose.
• 7. Borrow against equity at a preferred rate with a HELOC. - Banks will lend you money at a lower rate because the loan is secured by the property. There is less risk to the bank.
• 8. Generate income even in principal residence with an SDU, Air B&B, or lodger.
• 9. Most catastrophic events are covered by insurance, Ie. Fire.

Property Ownership Cons

• 1. Annual property tax and / or monthly condo fees. - $5,000 annual property tax = $55,000 to $60,000 after 10 years. Lost money that could have been invested in equities and earned $70 or $80 thousand instead of losing $60,000.
• 2. One-time upfront buying closing costs about 1.75%. - land transfer taxes, legal fees, Title Insurance. - $600,000 house x 1.75% = $10,500.
• 3. Paying interest on a large sum of money in monthly mortgage payments. - Payment $3,455 with 10% down payment, $2,663 Interest only $788 is principal.
• 4. Real estate commission fees when selling, 4% to 5%.
• 5. Annual maintenance costs. - Ie. Broken window, replace stained bedroom carpet.
• 6. Intermittent infrastructure costs. - Furnace 15 to 20 years about $5,000. Shingles 15 to 20 years about $10,000 +
• 7. Renovate / remodel costs. - Minor Ie. Bathroom vanity, sink, faucet or painting. Want to do vs need to do like maintenance.
• 8. Annual landscaping. - Even inexpensively. Ie. I spend $200 - $250 buying flowers, planters, mulch. $2,500 after 10 years.
• 9. Annual snow removal. - $425 about $5,000 after 10 years.
• 10. Not liquid, can take months to sell and get your cash. Prep house for sale 30 days, listed for 30 days to sell, buyer takes possession in 60 days = 4 months before get cash.
• 11. It’s not diversified, if the market goes down your price likely goes down.
• 12. Pay Capital Gains tax of 50% when selling an investment property.

Financial Market Investments Pros

• 1. No annual maintenance / reno costs.
• 2. Minimal or no cost to purchase.
• 3. Pays you interest / dividends monthly or quarterly.
• 4. Mitigate paying taxes now or in the future. • TFSA pay no taxes when withdraw. - Buy $88,000 since inception 2009 and it’s now $200,000 and you withdraw, there are NO taxes to be paid on that $200,000. • RRSP reduce taxes when buying.
• 5. Liquid asset, buy or sell withing minutes. - Either with your advisor or yourself online with a program called Questrade.
• 6. Buy and forget, occasional rebalancing. - don’t have to do frequent maintenance. May change percentage of stocks to bonds or buy GIC’s if warranted.
• 7. Risk diversification. Buy different asset classes Ie. Tech or REITS, stocks or bonds. - Stocks and bonds work in opposition to each other, so if you own both you can mitigate losses when markets decline. Buyer “blue chip” stocks like Apple or P&G.

Financial Market Investments Cons

• 1. Pay taxes if not sheltered in a Registered account.
• 2. TFSA low annual maximum limits. ($7,000 in 2024) -If you have cash to buy more, you can’t do so.
• 3. RRSP limited by one’s income.
• 4. ETF’s and Mutual Funds can have annual fees called MER and broker load fees. - 1/4% to 3%.
• 5. Many people don’t know what to invest in or when to invest. Warren Buffet said buy what mimics the S&P 500 when you have the money.
• 6. Risks, markets correct, recessions happen, possible to lose substantial equity quickly. political events, currency fluctuations, regulatory, etc. - Many find this stressful and sell when markets go into decline.
• 7. Catastrophic events typically not covered Ie. Nortel, Sam Bankman Fried of FTX, a cryptocurrency exchange. - Generally your cash is gone for good. No so with a house or even if it burns down there is still land value.

If you have decided that you want to invest in Stocks, talk to a financial advisor who specializes in them, and if you want to invest in real estate in the Ottawa area, start here, check out current listings of Income Properties.

Multifamily Homes for Sale across Ottawa

How much will your monthly mortgage payment be?

Here are the current mortgage rates with the monthly payment amount, per $100,000 of outstanding principal.  Mortgage rate tables provided by Alan Gilman with Dominion Lending Centres The Mortgage Source 613-552-1572.

November 28th Mortgage Rates and Payments

November 16th Mortgage Rates and Payments

Compare house prices and sales, see how they have changed in Kanata-Stittsville's neighbourhoods in 2023.

The following stats are for the last 3 months, ending November 23, 2023 as compared to the same period last year.

• Most Sales: Stittsville with 98 homes sold
• Highest Average Selling Prices: Rural Kanata at $1,032,850
• Largest Average Price Increases: 32.6% in Rural Kanata
• Fastest Sales: 20 days in Glencairn/Hazeldean

Highest and Lowest single home sale prices in Kanata-Stittsville

• Highest Sale Price: $1,601,000, Detached Bungalow with Loft, 5-Bed, 5-Bath home in Stittsville and Area
• Lowest Sale Price: $250,000, Condo Apt. with 2 Beds and 2 Baths in Beaverbrook

Notable Stats for Kanata-Stittsville Neighbourhoods

Compare home sales and prices in Barrhaven's Neighbourhoods and see how they are changing in 2023

Comparing neighbourhoods in Barrhaven for the last 3 months ending November 22, 2023 compared to the same period in 2022. 

• Most Sales: Half Moon Bay had 54 homes sell
• Highest Average Selling Prices: Cedar Hill/Orchard Estates at $3,050,000
• Largest Price Increases: Cedar Hill/Orchard Estates at 40.2%
• Fastest Sales: Heart's Desire saw homes selling on average in 9 days

Highest selling single sale in Barrhaven

• Detached 2-Storey, 5-Bed/6-Bath in Cedar Hill/Orchard Estates for $3,050,000

Notable stats for Barrhaven Neighbourhoods

Compare house prices in Ottawa's South End Neighbourhoods

These stats are for the last 3 months ending November 14, 2023 compared to the same period in 2022. 

Notable Statistics for South End Neighbourhoods

Compare house prices in Ottawa's Far West Neighbourhoods

These stats are for the last 3 months ending November 13, 2023 compared to the same period in 2022.

• Most Sales: Woodroffe Western Parkway had 32 homes sell
• Highest Average Selling Prices: Qualicum/Graham Park at $1,205,800
• Largest Price Increases: Qualicum saw an increase of 55.4% 
• Fastest Sales: Queensway Terrace North homes are selling on average in just 4 days

Highest and Lowest single house sales in Far West Ottawa and Nepean

• Highest Selling Price: Detached 2-Storey, 4-Bed, 3-Bath home in Crystal Bay/Rocky Point for $1,900,000
• Lowest Selling Price: Condo Apt., 1-Bed, 1-Bath in Woodroffe/Western Parkway for $249,900

Notable Statistics for Far West and Nepean Neighbourhoods

See how house prices have changed in Ottawa's West End

These stats are for the last 3 months ending November 12, 2023 compared to the same period in 2022.

• Most Sales: Parkwood Hills had 35 homes sell
• Highest Average Selling Prices: Carleton Heights at $1,076,060
• Largest Price Increases: Meadowlands/Crestview saw an increase of 27.4%
• Fastest Sales: Carlingwood at 2 days

• Highest Selling Price: Mooney's Bay 2-Storey, 4-Bed, 4-Bath home for $1,925,000
• Lowest Selling Price: Borden Farm/Stewart Farm Condo Apt, 2-Bed, 1-Bath for $247,000

Notable Statistics for West End Neighbourhoods

See how house prices have changed in Ottawa's East End

These stats are for the last 3 months, ending November 9, 2023 compared to the same period in 2022.

• Most Sales: 44 homes sold in Vanier
• Highest Average Selling Prices: $2,115,000 in Rockcliffe Park
• Largest Price Increases: Rothwell Heights prices increased by 73.4%
• Fastest Sales: 17 days in Manor Park

Highest and Lowest single home sale  in East End Ottawa

• Highest Selling Price: $3,200,000, 4-Bed, 5-Bath, Detached 3 Storey in Rockcliffe Park
• Lowest Selling Price: $191,000, 1-Bed, 1-Bath Condo Apt. in Beacon Hill South

Notable stats for East End Neighbourhoods