Income Statement - Property #2
Idea Senator had the following comment on my previous post:
Your expense seems kind of high. Can you tell me why and any ways of reducing it?
So, I thought I would break down the income and expenses for Ppty #2.
Income: $395/rm * 5 = $1975/mo
Expenses:
Mortgage Interest - $460
Condo Fees - $110
Ppty Taxes - $133
Electricity - $100
Cable & internet - $75
Total Expenses: $1173
Net Income: $1097/mo
Mortgage Principal - $295
Cash Flow = $802/mo
So, my yearly cash flow is about $9600, and my net income should be $13164. Not bad for a $30,000 investment. The mortgage payments are high because we only have 25% equity in the house, and it is slightly accelerated due to paying for 13 months in a 12-month period because the ’guru’ who set up the mortgage calculated at 4 weeks per month when determining our weekly payments.
Now… I can’t wait for these 18-years to be up so my interest and principal payments drop to zero and my net income climbs to $18,684/yr.
Any further thoughts on this IS?
NG
November 18th, 2006 at 11:25 am
[…] I guess I am lucky because the city I live in is heavily populated by students, and enjoys relatively low real estate prices. The average home in my city costs approximately $250,000 CDN, but you can find town-homes and a lot of smaller homes in the $150,000 range. My first home is a war-era home converted from 3 bedrooms to 5 bdrm, 2 bath. My second income property is a 3-bedroom townhouse converted to 5 bedrooms. Furthermore, I charge per bedroom since I am renting to students. This works out to $2000/month rent. Expenses are kept low ($1200-ish) including mortgage payments due to the low cost of the homes, so the mortgage payments are reasonable. […]