Financials on a 4 Unit Multi-Family Building in The Centretown Neighbourhood, Ottawa
This month we are looking at an older semi-detached, renovated property that was being used as a Fourplex, it sold in June 2017 and here are all of the financials on it. Looks very decent. The Cap Rate on this building was 4.7%.
Centretown 4 Unit Building, Sold June 2017
|Scheduled Rental Income (SRI)||$56,100|
|Effective Rental Income (ERI)||$53,856|
|Total Operating Expenses (TOE)||$16,193|
|Net Operating Income (NOI)||$37,663|
|Capitalization Rate (CAP)||4.7%|
|Operating Expense Ratio (OER)||30%|
|Sales Price X Net Income||21|
|Mortgage (@ 3.3%)||$516,750|
|Annual Debt Service (mortgage payments)||$29,346|
|Return on Investment (ROI)||3%|
From the numbers above, we mentioned that the Cap Rate of 4.7% was very good, and when we look at the Expense Ratio of 30%, this is quite low, so the buyer did quite well buying this building. Only 30% of the income will go towards the expenses.
The cash-flow at the end of the year, with a 35% downpayment was positive and that's what you like to see. This buyer has $8,317 positice cash flow which equates to a 3% return on their investment.
All-in-all this looks like it was a very good buy for the new investor.
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