I am wondering if anybody here as any experience in the Manitoba market. I am looking at a 4plex that is fully rented and by the looks of things the tenants will probably never move out. With Manitoba`s rent controls allowing on average just under a 2% increase per year the current rent being collected is about $4-450 below what a new place will earn. The owner is asking about $360,000.00 The property taxes are $5,000.00. The water bill is $1,650.00 for the year. The rest of the utilities are paid for by the tenants. The current rent being collected for the 4 suites is $2,662.00 per month. The following is the way I analyze it using my LOC for the 20% down payment.
2262 - income
1010 - mortgage variable at 2.3% or 1245 locked at 3.74%
197 - interest on LOC at 3.25%
417 - property taxes
137 - water bill
159 - management fees at 6%
200 - initial reserve fund for 12 months then reduced to 100
100 - maintenance
100 - insurance
________________
342 - positive cash flow or 107 at locked rate
Am I missing anything and do you that have experience recommend I go with a fixed or variable interest rate? Also does anyone have experience with increasing the rent above the Manitoba guidelines? Looking for a little bit of advice.
2262 - income
1010 - mortgage variable at 2.3% or 1245 locked at 3.74%
197 - interest on LOC at 3.25%
417 - property taxes
137 - water bill
159 - management fees at 6%
200 - initial reserve fund for 12 months then reduced to 100
100 - maintenance
100 - insurance
________________
342 - positive cash flow or 107 at locked rate
Am I missing anything and do you that have experience recommend I go with a fixed or variable interest rate? Also does anyone have experience with increasing the rent above the Manitoba guidelines? Looking for a little bit of advice.