Real Estate Investment

Bauer Lofts Condo in Waterloo Ontario for rent

Luxury Loft Living in the heart of Uptown Waterloo

You can rent a cool, spacious modern condo in Waterloo’s hottest new development, the Bauer Lofts.

If you’ve been waiting for the right building to call home, your search is finally over.

Your new home is located above Vincenzo’s and other premier retail & markets shops, and features premium finishings such as:

The Bauer Lofts is a historic site - originally home to the Bauer factory - and is one of the most desirable new condominium developments in the Waterloo Region.  The project sold out before construction started (although there are a handful of units now available again through the builder - contact us for information on these investment opportunities)

For more information, and to schedule a viewing, email me, or call me at 519 570 4447

Open House Weekend - Kitchener Waterloo Homes For Sale

Here’s another Keller Williams Realty Open House Extravaganza. We’re painting
the town red!

Please consider visiting these fine homes and tell the
Realtor that I sent you!

$215,000 ~ 33-12 Holborn Drive, Kitchener ~ Saturday Jan 10th 12-2pm
WOW! 1200 sq ft open concept condo in Stanley Park! 3 bedrooms, 2 parking spots. http://www.Kitchener-Condos.com for more

$259,000 ~ 85 Glenview Ave, Cambridge ~ Sunday Jan 11th 2-4pm
This great 4 bedroom home is nicely situated near one of Cambridge’s finest parks. Go to www.85Glenview.com for a visual tour.

$184,900 ~ 83 Mooregate Cres, Kitchener ~ Sat/Sun Jan 10th & 11th 2-4pm
A great investment opportunity! Only 7 years old, this 3 bedroom, 3
bathroom house is open concept, and a single car garage. All appliances
are included, close to all amenities. MLS # 0847317

$284,000 ~ 196 Vermont Street, Waterloo ~ Sat/Sun Jan 10th & 11th 2-4pm
Cozy, updated bungalow in desirable Waterloo location. Close to
schools, shopping and expressway! Great for young families and empty
nesters. MLS 0847302

$219,900 ~ 391 Lee Circle Waterloo ~ Sunday Jan 11th 1-3pm
Lincoln Village bungalow, finished recreation room, parking for 4 cars, newer vinyl flooring, eat-in kitchen, large shed. MLS

$339,000 ~ 23-545 Laurelwood Drive Waterloo ~ Sunday Jan 11th 2-4pm
Gorgeous bungalow condo, end unit with 9’ ceilings, gas fireplace,
hardwood floors in living room and dining room, double size deck,
professionally finished recreation room, sound attenuated common walls,
vaulted ceiling, inground sprinkler system. MLS

$249,900 ~ 325 Martindale Cres, Waterloo ~ Saturday Jan 10th 2-4pm
Quiet, mature neighbourhood. Large fenced yard, Close to Universities. MLS# 0844184

$340,259 ~ 590 Goldthread St, Waterloo ~ Saturday Jan 10th 2-4pm
Open concept, brand new home 3bed/3bath immediate occupancy Close to schools. MLS# 0834331

$549,900 ~ 557 Leighland Dr. Waterloo ~ Sunday Jan 11th 2-4pm
Custom built home with 4 B/R up + 1 down. Walk out basement with in-law potential. MLS# 0837624

$229,900 ~ 54 Tamvale Cres, Kitchener ~ Sat/Sun Jan 10th & 11th 2-4pm
Newly renovated semi on quiet crescent. Close to schools and shopping.
Walk out basement to stone patio and fenced yard. MLS# 0847365

$212,100 ~ 170 Coach Hill Dr, Kitchener ~ Sunday Jan 11th 2-4pm
Move in condition with 166 foot deep fenced lot and huge deck. MLS# 0844537

$444,900 ~ 348 Wyecroft Bl, Waterloo ~ Saturday Jan 10th 2-4pm
Priced to sell. Fabulous Beechwood home 4 bed/3 bath. Gardeners delight, waterfall and pond. MLS# 837856

$259,900 ~ 306 Westmeadow Dr, Kitchener ~ Sat/Sun Jan 10th & 11th 2-4pm
Brand new home. 3 bed/2 bath with Great room above garage. Immediate occupancy. MLS# 0844580

$298,000 ~ 40 Renner Drive , Cambridge ~ Sunday Jan 11th 2-4pm
Lovely open concept Hespeler home with walkout basement; Master bedroom
with walk in close and ensuite bath. Unspoiled basement; minutes to
401. MLS# 0847113

$244,900 ~ 50 Farrier Place, Kitchener ~ Sunday Jan 11th 2-4pm
Fantastic bungalow on quiet cul-de-sac with 2 walkouts; wood fireplace
in rec room with walk out to huge pie shaped lot; double drive, single
garage. MLS# 0847280

$264,900 ~ 15 Highpark Drive, Kitchener ~ Sunday Jan 11th 2-4pm
Fabulous bungalow on large lot with inground salt water pool; carpet
free; large rec room with bar and pool table included; 2 sheds, one
with hydro. MLS# 0841672

$270,000 ~ 1117 Copper Leaf Cres, Kitchener ~ Sat/Sun Jan 10th & 11th 2-4pm
3 bedroom, 3 bathroom home in Laurentian West. Finished top to bottom. Immediate possession available. MLS # 0911040

$229,900 ~ 209 Samuel Street, Kitchener ~ Sat/Sun Jan 10th & 11th 2-4pm
East Ward! Beautiful old world charm in desirable neighbourhood. Single detached 3 bedroom,2 bathrooms, recent finished
basement, updated electrical, plumbing, furnace and central air. Just move in!

329 Northlake Dr unit 9, Waterloo ~ Sat/Sun Jan 10th & 11th 2-4pm
Perfect for First time Buyer or investor condo, 2 Bedrooms 1 Bathroom,
one level, controlled entry, close to shopping, Transit and Highways.

$250,000 ~ 419 Rittenhouse Road, Kitchener ~ Sat/Sun Jan 10th & 11th 2-4pm
Finished basement. Gas Fireplace single garage.

$250,000 ~ 110 Weber Street South, Waterloo ~ Saturday Jan 10th 2-4pm
Huge master, rental potential, detached garage.

$500,000 ~ 27 Paul Ave, Roseville ~ Sunday Jan 11th 2-4pm
1/2 acre lot, 3,200 Sq. Ft. 4 gas fireplaces.

$310,000 ~ 606 Manchester Road, Kitchener ~ Sunday Jan 11th 2-4pm
4 bedrooms, hardwood throughout, Rosemont Gem!

$214,900 ~ 257 Snyder’s Rd E Baden ~ Saturday Jan 10th 11-1pm
Beautifully decorated 3 bedroom, 2 storey home, ceramic floor in entry,
kitchen and powder room. Hardwood floor in living room, awesome 156
foot lot!

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If you’d like to see any of these beautiful homes, but can’t make the open house this weekend, email me or call me at the office - 519 570 4447

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Kitchener Waterloo’s Favourite Real Estate Agent** wants to show you how Investing in Real Estate can make you wealthy and build financial freedom and security for you and your family. Benjamin works with people from all across Ontario, Canada and the world helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative, and runs the Wealth Team at Keller Williams Golden Triangle Realty in Kitchener Waterloo.

He’d love to answer any questions about buying, selling and owning a residential, or income & investment property in the greater Waterloo region.  To start on a plan to invest, email Benjamin today.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

**Gold Award, Kitchener Waterloo Record Readers Select Awards 2007

Nearly New Kitchener Condo For Sale

This condo is no longer available.  Please contact us for current Condos for Sale in Kitchener Waterloo

33-12 Holborn Drive in Kitchener is a fantastic opportunity to acquire a nearly new (completed in 2008) condominium in Kitchener’s desirable Stanley Park neighbourhood.

This 3 bedroom condominium features a roomy open concept floor plan, 1200 square feet all on one level, including a Kitchen with a breakfast bar & island, and lots of cupboards and counter space.

We have clients who are renting identical units in this condominium complex for between $1200 and $1250 a month, so this represents an opportunity for Investors looking for a great condo, or someone looking to downsize from a home to the easy condo lifestyle.

Spacious 4 piece washroom

Jeff Zabel with Mortgage Alliance has provided us with some information on potential mortgage payments, so you can see how affordable the Kitchener Condo is to buy:

Monthly Principal and Interest (P&I - mortgage) charges based on 3 different downpayments

With 5% Down - P&I is $1049.86 / month

With 10% Down - P&I is $987.37 / month
With 20% Down - P&I is just $857.09 / month

*Above Rates Based on a 4 yr term at 4,95% interest rate, ammortized over 35 years.

The above amounts are estimates and qualification still depends on a formal mortgage application, credit verification and other conditions as may be necessary for approval. The above rates are subject to change without notice.

If you’re a first time buyer, this condo makes a great choice. Ideally located near the expressway (easy access to Waterloo, Cambridge, Guelph, Pearson Airport, Toronto and other parts of South Western Ontario), major shopping (grocery stores, pharmacy, LCBO, post office, restaurants etc), and it’s on the Grand Rapid Transit (GRT) #1 Bus Route

Combine that with the location close to schools and this condo has the ideal Stanley Park location.

Set up a Private Viewing

Request More Info

or Call Benjamin @ 519.570.4447

You can find more pictures of this great condo for sale at http://kitchener-waterloo-condo-for-sale.blogspot.com/

Check out this Real Estate Video about the almost New Condo in Kitchener
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Kitchener Waterloo’s Favourite Real Estate Agent** wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from all across Ontario, Canada and the world helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative, and runs the Wealth Team at Keller Williams Golden Triangle Realty in Kitchener Waterloo.

He’d love to answer any questions about buying, selling and owning a residential, or income & investment property in the greater Waterloo region.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

**Gold Award, Kitchener Waterloo Record Readers Select Awards 2007

Real Estate Investment Tip: Raising Rent in Ontario

Real Estate Investors in Ontario know there is a cap on an annual rent increase.  This is governed by the Residential Tenancies Act, 2006. 

Did you know that not all rental properties are subject to this ?  Our clients are investing in Kitchener Waterloo properties with an important piece of knowledge - Do you know it ?  Watch the video below to find out!

 

How much can you raise rent every 12 months on a residential tenant ?  Depends !

 

Do you have questions about being a landlord ? Email Benjamin at Benjamin(AT)BenjaminBach.com  with your questions!

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Related Links:

Ontario Residential Tenancies Act, 2006

Landlord and Tenant Board

–

 

Kitchener Waterloo’s Favourite Real Estate Agent** wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from all across Ontario and Canada and the world helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative, and runs the Wealth Team at Keller Williams Golden Triangle Realty in Kitchener Waterloo. He’d love to answer any questions about buying, selling and owning a residential, or income & investment property in the greater Waterloo region.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

**Gold Award, Kitchener Waterloo Record Readers Select Awards 2007

Kitchener Waterloo Real Estate Investing Workshop

People always ask me how they can learn about investing in real estate.  It can seem complicated, but if you learn how other successful investors have done it, you can do it too.

Join me on Tuesday October 28 as I share proven systems and models that Millionaire Real Estate Investors have used for generations to build true financial wealth. 

You will start down the path of being a Millionaire through real estate investment.

In this 90 minute interactive workshop, we’ll be looking at:

• How to get started investing in residential real estate
• Why so many people from across Canada are focused on the Kitchener Waterloo area as the #1 place they want to invest their money
• Whether you want to invest for Cash Flow or Equity Growth initially
• and where to find the professionals you need in your network and on your Wealth Dream Team

The workshop is FREE with registration (click here to register). 

Anyone can do it, not everyone will. Will You?

WHEN: Tuesday October 28th, 7:00-8:30pm

WHERE: Keller Williams offices, 871 Victoria Street North, Kitchener Ontario. (click for map)

Why People across Canada Invest in Kitchener Waterloo Real Estate

"We expect growth in Waterloo-Guelph to exceed both the Ontario and Canadian rates over the 2009-12 period"  - Dr. Sherry Cooper, Chief Economist, BMO Capital Markets.

(source: body soul and spirit)

This year we’ve been fortunate to work with great people from across the world buying and selling real estate in Waterloo region.  Calgary, Alberta; Vancouver, British Columbia; Eastern Europe, the Middle East, Guelph, Cambridge, Toronto, London, Montreal - just to name a few.

When we speak to clients, we ask them why they’ve decided to invest some of their hard earned investment capital into Kitchener Waterloo, Ontario, instead of a property in their home town or country.  We hear a variety of responses from: Affordable purchase prices; low vacancy rate; great student rental market (with some great opportunities right now); growing, young & diverse economy; proximity to Toronto and Major US Cities via the 401 highway - just to name a few, again.

Last week BMO published a report with some great information on why Waterloo Region is attracting so much attention from Real Estate Investors.  The report detailed some of the investments being made into the region, as well as some of the reasons that the rate of growth is predicted to exceed the nation’s.

In Kitchener, the University of Waterloo’s School of Pharmacy building will open this year, and construction will start this year on a new medical school. Both are part of the University of Waterloo’s new Health Sciences Campus in downtown Kitchener. A new recreation centre with twin ice pads, boxing facilities and indoor walking track opened this year. Fairview Park Mall recently received a $33 million makeover. St. Mary’s General Hospital will complete a 115,000 square foot addition this year, part of a multi-year $90 million renovation and expansion program. Grand River Hospital will renovate its intensive care unit and construct a new mental health unit, starting this year. The City of Kitchener is spending $46 million to convert the former BF Goodrich plant into its new central maintenance facility. It is hoped that work will begin this year on the $90 million Centre Block redevelopment. This project would include two residential towers, public parking and retail shops. Also, there is a $100 million proposal to redevelop the former Sportsworld site, with offices and small retail shops. 

 

In Waterloo, Conestoga Mall is undergoing a $50 million renovation and expansion. Construction will begin this year on the Balsillie School of International Affairs in downtown Waterloo. Two new buildings are being built at the University of Waterloo’s Research Park: the $8 million first phase of the Research Accelerator Centre and the $20 million InnoTECH building. The University of Waterloo’s School of Optometry is getting an addition to be completed in 2009. There are also a number of other building projects at the University of Waterloo. Future projects include a $25 million joint city/YMCA library and recreation centre. A proposal has been made to redevelop the Canbar site — a $200- to-$250 million project including a 280-room hotel, apartment and condo towers, and office and retail space. Preliminary discussions are taking place about a possible new law school in downtown Waterloo.

Outside of the major cities, the largest project is a $29 million arena and recreation centre in Elmira, which is to be completed in 2009. A $200 million gas-fired power plant in Waterloo Region southeast of Cambridge has been proposed.

Municipalities within the region are rushing to make more industrial land available. In Guelph, the first phases of the city’s Hanlon Creek Business Park, which will eventually have more than 350 acres of serviced land, will be available later this year. In Cambridge, the city plans to start bringing the Boxwood subdivision in the Cambridge Business Park to market in 2008, with 150 to 170 acres of developable land. In Kitchener, an additional 30 acres will be available at the Huron Business Park in late 2008. Meanwhile, in Waterloo, there are no city-owned industrial lands available as the city conducts a strategic review.

 

In addition, properties which were sitting idle for longer periods are now being redeveloped into condos, such as the former Arrow shirt factory in Kitchener, the former Tiger Brands knitting factory in Cambridge, and the former Bauer Industries plant in Waterloo. There are also plans in the making to redevelop the former Canbar (Canada Barrel) property in Waterloo into mixed use (hotel, residential, office, retail) and the former Lafarge property in Guelph into commercial space.

…

Third, the area has a relatively youthful population and strong net inmigration. The population of the area
is expected to continue to grow faster than both Ontario and Canada over the medium term. This, in turn, will support residential construction and retail sales.

Fourth, the excellent educational institutions in the area are a source of strength. The University of  Guelph, the University of Waterloo, Wilfrid Laurier, University and Conestoga College are all top-ranked  institutions in Canada and, in some fields, the world. All have strong connections to the business community through their co-operative education programs. Further, these educational institutions have been good incubators for new companies through their research programs.

Fifth, the area’s industrial mix positions it for growth. The advanced manufacturing, information and communications technology (including computer and electronic equipment), and biotech clusters, in particular, have strong growth prospects.

The government of Ontario has targeted advanced manufacturing, in which the Waterloo-Guelph area has
particular strength, as a priority with its $500 million Advanced Manufacturing Investment Strategy.

…

Kitchener By Night

 

The Province of Ontario recently passed the Places to Grow Act, which provides a legal framework for
growth planning in Ontario. Waterloo-Guelph is part of what is called the outer ring of the Greater Golden Horseshoe. There is limited room for growth in the inner ring of the Greater Golden Horseshoe. Surrounding the inner ring is a greenbelt, which the province plans to maintain with limited development. Therefore, growth in the Greater Golden Horseshoe will leapfrog the greenbelt over the next twenty-five
years into the outer ring. As development leapfrogs the greenbelt, the population of Waterloo-Guelph  will expand rapidly.

The population of the Greater Golden Horseshoe is projected to rise 48% between 2001 and 2031, from 7.8 million to 11.5 million. The population of Waterloo Region is projected to rise 60% from 456,000 in 2001 to 729,000 in 2031. The population of Wellington County, including the City of Guelph,1 is projected to rise 65% from 195,000 to 321,000. As the area expands, major transportation projects are already in the planning stages. A new Highway 7 between Kitchener-Waterloo and Guelph is being planned, at a cost of $300-400 million. Construction could start as early as 2011. Also, Waterloo Region is considering a rapid transit rail line. The first phase, at a cost of over $300 million, would run from  Waterloo to Kitchener. A second phase would continue to Cambridge.

Waterloo-Guelph has developed a reputation for innovation. Its entrepreneurial spirit has allowed it to
reinvent itself over the years. Old companies close their doors, but new ones are continually opening up. Waterloo-Guelph is leading the charge from the old economy based on traditional manufacturing to the
new economy based on high technology and services.

For the full report click here to email me.

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Kitchener Waterloo’s Favourite Real Estate Agent** wants to show you how Real Estate
Investing can make you wealthy. Benjamin works with people from all across Ontario and Canada and the world helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying, selling and owning a rental, income or investment property.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

 

 

**Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008

Real Estate Investing 101: Cash Flow or Equity Growth ?

Today’s question comes to us from a rookie real estate investor, just beginning to acquire real estate investment opportunities in the Kitchener Waterloo area:

"Should I focus on Cash Flow or Equity Growth when I start to invest in real estate?"

 

Great question.  Click play to watch the answer

 

Are you focusing on equity growth, or monthly, pre-tax cash flow?  What has been successful for you ? 

Share your answers below in the comment section!

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Do you have a question about real estate investing that you’d like Benjamin to answer ?  Is there something you need some clarity on’?  Don’t know what a NOI or GRM is, or whether or not it’s applicable ?

Send all your questions to Benjamin @ BenjaminBach.com and they’ll be answered right here in an upcoming episode of Real Estate Investing 101

 

Kitchener Waterloo’s Favourite Real Estate Agent** wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from all across Ontario and Canada - and recently, the world! - helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying, selling and owning a rental, income or investment property.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

**Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008

Learn how to be a Millionaire in only an hour (and a half)

Seriously!  It may take a bit longer to make your first million, but on Thursday April 17 I am sharing systems and models that Millionaire Real Estate Investors have used for generations to build true financial wealth. 

You will start down the path of being a Millionaire.

In this 90 minute interactive workshop, we’ll be looking at:

• How to get started investing in residential real estate
• Why so many people from across Canada are focused on the Kitchener Waterloo area as the #1 place they want to invest their money
• Whether you want to invest for Cash Flow or Equity Growth initially
• and where to find the professionals you need in your network and on your Wealth Dream Team

The workshop is FREE with registration (click here to register). 

 

Anyone can do it, not everyone will. Will You?

WHEN: Thursday April 17th, 7:00-8:30pm

WHERE: Keller Williams offices, 871 Victoria Street North, Kitchener Ontario. (click for map)

 

 

Kitchener Waterloo’s Favourite Real Estate Agent** wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario, Canada (and recently, the world!) helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying, selling and owning a rental, income or investment property.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

**Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008

On Cap Rates and Capital Growth

Last week, a prospective investor from Stratford, Ontario - a picturesque town about 30 minutes from Kitchener Waterloo - emailed a question to me. 

She asks, "What is, and how do you calculate a Cap Rate ?"

Great Question.  Cap Rate, short for Capitalization Rate, is a rule of thumb (a rough calculation) that compares the net income of a property relative to the market value. 

Net Income means the income left after paying the operating expenses and taxes on a property - it usually will not include servicing the debt - or the mortgage payments. 

A property listed for $1,000,000 with $80,000 in net rental income (so, this might be $120,000 in gross rental income, and 40K in expenses like management, property taxes, utilities, hydro, maintenance, vacancy allowance, reserve fund contributions etc.) would have a cap rate of 1,000,000 / 80,000 - or 8%.

After I answered her question, I cautioned her against relying on the cap rate to evaluate a solid investment property.  It seems conventional wisdom still says that a high cap rate is the golden turkey of Real Estate Investing.

I like disputing conventional wisdom, so I told her:

Cap rate doesn’t take into account financing options, location, condition, vacancy, zoning, permitted uses, property type etc., so it’s not usually a precise analysis relied upon by investors and real estate investment professionals.

A high cap rate is preferable every time….  as long as the property is in great shape, well located, attracts good tenants, and will let your capital appreciate at a healthy, and optimized rate.  Now… if you’re chasing a 11% cap rate, and buy a property in need of some work, in the area of town that isn’t the greatest…  it could cost you a fortune over the long run.

The cap rate doesn’t consider the age of the house, the condition, the location, the vacancy rate of the area, the potential future use of the home, the prospects for appreciation of your capital (i.e. what really matters).

An investment property with a 7% cap rate in great shape, in an in-demand neighbourhood with solid prospects for appreciation and growth, is preferable (to me and most of my clients) to rental home with a 11% cap rate in need of work, in a sub-great area of town.  Does this make sense to you ?

As Jeff Brown said this week:

If growth is your primary goal, acquiring double digit cap rate properties will almost always have the following two consequences:

1. Your cash flow will increase, relative to your last property.

2. Your capital growth rate will simultaneously decrease, as most smallish residential income properties sporting high cap rates are in lower demand areas.

THAT’S WHY THEIR CAP RATES ARE SO DARN HIGH. [emphasis mine]

Don’t chase cap rates; find opportunities for your capital to grow at an accelerated rate.  That way, when you decide to stop working at your job you are wealthy enough to do whatever you want. 

That’s why most of us are investing in real estate in the first place, right ?

–

Kitchener Waterloo’s Favourite Real Estate Agent* wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario and Canada helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying or selling a rental, income or investment property.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

*Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008

Would you rather have 1 condo in Kitchener Waterloo or 2 ?

That’s the question I found myself asking after completing a quick analysis I did for a client looking to invest some equity in the Kitchener Waterloo Real Estate market. 

With an initial $30,000 to invest, coming from non-performing equity ("dead money") in their principal residence, we have a few options.  Naturally, we want to pick the option that maximizes return while minimizing capital risk (i.e. we want to make money while preserving the capital we’ve investing)

My client wanted to know what effect different down payment amounts would have on the growth of his family’s equity.  Should he put more down, or less? 

Good question!

I explored two scenarios for what real estate property he could acquire with that initial investment: 

Scenario 1 had the client acquire 2 condominiums in Kitchener Waterloo for around $130,000 each, with a 10% downpayment.  Accounting for closing costs, we’re going to say the initial investment in each condominium is $15,000, which lets us acquire two units with the initial $30,000 equity.

Scenario 2 has the client use the same $30,000 to acquire 1 condominium in Kitchener Waterloo, with a more traditional 20% downpayment - $26,000 + closing costs.

Scenario 1: $260,000 in property.  Scenario 2: $130,000 in property

In Scenario 1, you’re looking at between $20-50 a month negative pre tax cash flow per unit; Scenario 2 yields about $50 a month positive pre tax cash flow, after accounting for condo fees, tax, and mortgage payments (which are a bit higher in Scenario 1 since you’re borrowing more, and are likely incurring mortgage insurance premiums). 

In the grand scheme of this client’s family income & tax considerations, $50 either way doesn’t make a big difference each month.

Fast forward a couple of years.  Say the value for these condominiums have risen 10%, not an unreasonable assumption given the past performance, and prospects for growth in the Kitchener Waterloo real estate market.  What do the two scenarios look like?

Scenario 1: 2 condominium units, each worth $143,000 ($130,000 initial price plus 10% appreciation, or $13,000)

$23,600 returned on initial $30,000 investment, for a 79% ROI 

Scenario 2: 1 investment condo worth $143,000

$14,200 returned on initial $30,000 investment, for a 47% total ROI

Even after accounting for the positive cash flow from Scenario 2, and the negative cash flow from Scenario 1, Scenario 1 - acquiring the condominiums with 10% down to maximize the growth of capital - yields a significantly higher ROI - return on investment.

My client can acquire twice as much real estate investment property with the same amount of equity, and significantly increase his capital growth rate.

Most people don’t realize how much money they’re leaving on the table by not ‘optimizing’ the growth rate of their equity.  Many people just don’t know what they don’t know.  By educating yourself before you acquire your first investment property, or before you buy your next rental home, you will dramatically increase your returns and the rate at which you build your family’s wealth.

Don’t be like most people - be like my client: have your equity working hard for you.

Sign up now for my FREE Millionaire Real Estate Investment workshop, February 7th @ 7pm and learn proven strategies and models to acquire a Millionaire’s real estate investment portfolio.

–

Kitchener Waterloo’s Favourite Real Estate Agent* wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario and Canada helping them build wealth through smart real estate investments.

Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying or selling a rental, income or investment property.

You can reach Benjamin at Benjamin(AT)BenjaminBach.com or call him at 519 570 4447

*Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 - 2008

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