Friday, July 4, 2008

House was a bust

Meh, it was a dive, just like I was worried. If I could just buy the garage, though...that would be nice. The basement was unliveable, and there was evidence of two kinds of leaks - one the difficult to fix general wet basement type, and the second the also difficult to fix and even scarier cracked sewage stack! No evidence of crack, but dripping down the sides.

The first floor apartment had a great living room and bedroom (gorgeous) but the kitchen was badly in need of an upgrade and the bathroom was disgusting. Who puts drop ceiling tiles in a bathroom? They're only slightly less gross than carpet in a bathroom.

The second floor was pretty nice, and the third floor was as nice as a third floor teeny 1-bed can be. All utilities paid by owner. Full fire escape in decent condition, legal access/egress to every unit. If I had a bunch of money to burn, it would make a good long-term investment. I'd offer $150K and see what happens. Rob is not interested at ALL - he wants something we can put tenants into with minimal fuss as soon as possible. I can understand that. There's still a lot out there.

I have a few more on my short list. Some people are just ridiculous in their asking prices though. A triplex in Hamilton will be hard-pressed to garner you $2300 a month in rental income - and that only if you include utilities! You gotta figure on $150/mo for insurance, $200/mo for heating, $250/mo for hydro and water, $200/mo for taxes. That leaves you with only $1500 a month to pay the mortgage. A $200K mortgage right now (so about $210K purchase price with 5% down) will cost you about $1300 a month. So, before you've done any maintenance, advertising, or had a single vacancy, you're only pocketing $200 per month. $600 a year (edited to fix: $2400 per year). One furnace and poof! That's all gone. Hell - two turnovers with cleaning and painting and it's mostly gone! It's really a long-term investment, not a short-term cash gain.

So, why the hell would there be good solid triplexes with $2000 monthly rents listed for over $250,000? Do these people think we're nuts? Or are they marketing to the Toronto buyers who just don't care because the same house in their backyard would cost $600,000 and they figure they'll make it work with a small deficit? Good luck. I have no interest in carrying a deficit when things are at their BEST.

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