Newmarket Real Estate Realtor for Busy People™

Friday Harbour For Investors


Friday Harbour for Investors

 

See Investor Online Reports Below

Sample of 5-Min Property Analysis™ for Investor Clients

2Bed, 2Wash , 750SF  Priced at $720K - 6 Month Rental Plan (in Off-Season)

Assumptions

Rental Period 6 months - Apr-Nov Rental Avg/Mth $3,133
Vacancy 20% Rental Avg/YR $18,800
Mortgage Down 30% Interest Rate 2.44%
Mortgage Amort 25 Yrs Condo Initial Value $720K
Cost Inflation 2% Rent increase 4%/yr
Market Appreciation 10% Property Mgt Self
Housecleaning tbd Lake Fees Suspend during rental

 

Year 1

Year 2

Year 3

Year 4

Year 5

Rental Income (based on 6 months of rental in Off-Season - Nov-Apr)  

18,800

19,552

20,334

21,147

21993

Less Vacancy/Bad Debt at 20%

3,760

3,910

4,067

4,229

4,399

Gross Operating Income

15,040

15,642

16,267

16,918

17,595

Expenses

         

Property Taxes
(0.50% of Purchase Price)

3,600

3,672

3,745

3,820

3,897

Condo Fees - $.63 per SF +HST

6,407

6,535

6,666

6,799

6,935

Resort Association Fees $1.60/SF +HST

1,356

1,383

1,411

1,439

1,468

Lake Club Fee (suspended for rental period) - 6 mths

846

863

880

898

916

Utilities (metered and paid by tenant during tenancy)

750

765

780

796

812

Insurance 480 490 499 509 520

Internet & Sec Monitor - incl in Condo Fees

 

 

 

 

 

Property Management Fee (not used)

 

 

 

 

 

Repairs, Supplies

1,200

1,224

1,248

1,273

1,299

Cleaning Services  tbd tbd tbd tbd tbd

Total Expenses

14,639

12,534

12,784

13,040

13,301

           

Net Operating Income (NOI)

401

3,108

3,483

3,878

4,294

less Mortgage Payments

30% Down, 2.44% , 25 Years

26,950

26,950

26,950

23,142

23,142

Cash Flow (CF) - This Year Negative if Red

(26,549)

(26,240)

(25,913)

(25,567)

(25,201)

Cash Flow (CF) - Accumulated

(26,549) (52,789) (78,702) (104,270) (129,471)

Annual Market Appreciation

72,000

79,200

87,120

95,832

105,415

Accumulated Market Appreciation 72,000 151,200 238,320 334,152 439,567

CF (this Yr) + Appreciation

45,451

52,960

61,207

70,265

80,214

Condo Market Value - 10%/yr

792,000

871,200

958,320

1,054,152

1,159,567

Selling Costs (Realty + Legal) @5.25% +HST 47,000 52,000 57,000 63,000 69,000
Gross Profit on Sale 745,000 820,000 901,000 992,000 1,091,000
Mortgage Owed Originally 504,000 504,000 504,000 504,000 504,000
Accumulated Mortgage Paydown 14,817 30,000 45,558 61,499 77,834

Mortgage Balance 

489,183

474,000

458,442

442,501

426,166

Net Profit on Sale after Mortgage Paid

255,817 346,000 442,558 549,499 664,834
Plus: Get Downpayment Back 216,000 216,000 216,000 216,000 216,000
Accumulated Negative Cash Flow (Operational Loss) 26,549 52,789 78,702 104,270 129,471
Net Profit minus Cash Flow 229,268  307,910 395,064 491,526 598,156

 

CAUTION: These data are for illustrative purposes only. You must verify for your specific needs. 

Clients Receive this Analysis for their Condos of Interest

See My YouTube Video on 5-Min Property Analysis™ for Investors*

*Developed and Owned by Dennis Paradis, All Rights Reserved

 

What Does All This Data Suggest?

  • You could enjoy the use of  a 2-Bed condo at Friday Harbour for 6-Months per year during Prime Season for 5 years and pay about 26,000 per year in Cash Out per year or 129,471 over 5 years (see 5th year column above) . Assumes you use condo for yourself in Peak season, eg;  May-Oct and rent during rest of year (Nov-Apr). 
     
  • ​This means at the end of 5 years, your Mortgage Paydown (MPD) of 77,83and 10% Market Appreciation of 439,567, totalling $517,567, would pay for a negative Cash Flow of 129,471 and after Selling Expenses of about $69,000 , you would still be ahead almost $600,000 in Net Proceeds before Tax.
     
  • In other words, you get to use the unit FREE for 6-months during Peak Season (not counting personal and entertainment costs), and make a Profit on your sale of $600,000 before tax at the end of the fifth year.

  • 5% Market Appreciation (not shown here) would have a total of $200,000 + MPD of $78,000 for a Total of $278,000 and still be ahead after Selling Expenses of about $46,000 by about $372,000 if you sold in 5 years. 

 

  • Use this data as a guide but remember results are not guaranteed. You must do your own due diligence based on your best judgement.
     
  • Key Assumption is Market Appreciation.  

 

Call Dennis Paradis at 416-399-5832

Return to Friday Harbour Made Easy page 


Online Investment Reports


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Summary Chart from My Friday Harbour Investment Report


Friday Harbour Investment Analysis Report - 9 Scenarios

Complete Report avaiable to download above.

Nine Investment Scenarios – in Descending Order of Profitability

Friday Harbour Resort (FH) – Investment Analysis

Scenario 2  (50/50rental/personal use)  is shown in detail in the Appendix of my Investment Report

Investment Terms
MAR – Market Appreciation Rate – Your growth in Equity
Net Proceeds – Initial Investment +/- Cash Flow + MPD + Selling Value of Condo - Selling Costs.
NPV – Net Present Value – Net Proceeds but discounted for timing of the flows. Using Discount Rate of 8%
IRR – Internal Rate of Return – The discount rate that takes all the cash flows to Zero
B/E - Breakeven – The first Year in which the NPV is not zero or negative.