Financial info and the Return on Investment for a 6-unit Building in Sandy Hill, Ottawa
Below is a video covering the financial information for the recent sale of a 6 Apartment building in Sandy Hill, we'll let you decide if the buyer got a good deal, we provide you with the Cap Rate as well as the ROI based on the investor dropping a 35% down-payment.
Sandy Hill 6 Unit Building, Sold July 2017
|Scheduled Rental Income (SRI)||$137,520|
|Effective Rental Income (ERI)||$132,019|
|Total Operating Expenses (TOE)||$49,253|
|Net Operating Income (NOI)||$82,766|
|Capitalization Rate (CAP)||5.5%|
|Operating Expense Ratio (OER)||37.3%|
|Sales Price X Net Income||18|
|Mortgage (@ 3.25%)||$975,000|
|Annual Debt Service (mortgage payments)||$56,881|
|Return on Investment (ROI)||4.9%|
From the table above I would say that this was a decent investment, which gave this investor over $2000 cash-flow every month and the building shows a Cap Rate of 5.5% which is considered quite high for a neighbourhood like Sandy Hill. This buyer got a Return on their Investment of 4.9%.
The Total Expenses above take into account the maintenance and management for the building as well.
This buyer put down $525,000 to buy this property, which equates to 18 times the NET Income of the property and this is considered low to fair, with the total expenses at almost $50,000 per year, but at the end of the day, all that really matters is the amount of cash you can put in your pocket every month or year and in this case it was a very decent purchase IMHO.
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