One Bedroom Condo (570 sq. ft.) in Downtown Toronto

Case Study*

Detailed Analysis**

  • Deposit Structure
  • Estimated Cost on Closing
  • Annual Cash Flow Analysis
  • Performance Measures
  • Return on Disposition
  • Deposit Structure

    Upon Signing 5% C$10,375
    60 days after signing 5% C$10,375
    180 days after signing 5% C$10,375
    Upon occupancy 20% C$41,500
    Total Cash Deposited 35% C$72,625
    Mortgage Financing 65% C$134,875
  • Estimated Cost Upon Occupancy and Final Closing

    Land transfer tax C$3,600
    Estimated Ontario New Home Warranty Program C$500
    Metering Fee C$1,300
    Legal fee and disbursement C$1,500
    Total Closing Cost C$6,900
    Total Investment Cost C$214,400
    Total Cash Investment C$79,525
  • Annual Cash Flow Analysis

    Cash Inflow

    Gross rental income at 7.3% of purchase price C$15,120
    Total Cash Inflow C$15,120

    Cash Outflow

    Property tax at 1.25% of purchase price (C$2,075)
    Common element expenses at C$0.38 per sq. ft. C$2,736
    Management Fee at 6% of yearly rent (C$908)
    Total Cash Outflow (C$5,719)
    Net Cash Flow (before mortgage payments) C$9,401
    Annual Mortgage Payments1 (C$9,413)
    Net Cash Flow (C$12)
  • Performance Measures

    Gross Income to Investment Cost Ratio

    Gross Income Investment Cost
    C$15,120 C$214,400
    7.05%

    Gross Income to Total Cash Investment Ratio

    Gross Income Total Cash Investment
    C$15,120 C$79,525
    19.01%

    Net Cash Flow1 to Total Cash Investment Ratio

    Net Cash Flow Total Cash Investment
    C$9,401 C$79,525
    11.82%
  • Investment Analysis Upon Future Disposition of Real Property

    After 5 Years

      ASSUMPTIONS
    • Property value in Toronto Downtown will be increased at 5% per year for the next 5 years
    • Disposition cost will be approximately C$14,000 that includes selling commission, professional fees and disbursements etc.
    Selling Price C$265,000
    Disposition Cost (C$14,000)
    Total Investment Cost (C$214,000)
    Capital Gain1 C$36,600

    Return on Total Cash Investment:

    C$36,600 / C$79,525 = 46.02% Over 5 Years

    Annualized Return = 9.2%

*This example does not take into consideration price fluctuations and market trends.
**Estimates only.

Company Profile

Prescott Property Management Ltd.
7330 Yonge St., Unit #116
Thornhill, Ontario L4J 7Y7
(905) 709-6296 ext. 1361
Fax : (905) 764-1274
info@prescottpropertymanagement.ca

 
 

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