Need second opinion: buying 2-unit house to live & rent

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Hi all,

I'm preparing to buy my first property in GTA, Canada. I'd like to run these numbers by you to see if I'm fairly on track, or if I'm getting into a big mess. What do you think?

An example of a semi-detached house I'm looking at is $424,000 so monthly mortgage payments will be about $2000.

I've estimated annual expenses at $20,865.
3,790 Taxes
720 Insurance
1500 Hydro
120 Advertising
1500 Gas
500 Water & waste
12,735 Maintenance (at 3%)

I'll be getting more accurate numbers once I make an offer and start due diligence. But am I roughly ok with these?

That brings my total monthly bills to $3,645. I estimate I can live in the basement and rent out the top portion (2-3 bedroom) for $1,300 so I'll have to cover $2,345 myself.

Looking at the amortization table, I'm putting about $1,000 per month towards principal, averaged over the first 5 years. Since GTA is expected to continue growing strong and house prices are expected to increase, I can somewhat safely assume that when I sell, I'll get the same price I paid.

Currently I rent at $1,300. Assuming I put $1,000 a month on top of that towards a savings account (ie. paying off the principal) I'll be paying $2,300 every month... the same as my real expenses for owning the house.

I hope I explained it properly. I'd appreciate any feedback.

Tabatha

[Gary McGowan]

The GTA huge market. I own a number of properties in this area. If you can provide the location I could comment on the value and offer specific feedback for you.

I would say at first glance your maintenance budget is very high at 12k a year. Unless the home has a large amount of deferred maintenance. Typically I use 5% of the gross income.

What mortgage numbers are you using?

20% down 3.25% interest rate 25 yr am
Is a payment of 1649 per month.
Are you looking at 5% down mortgage ?

You can always pm me for more info. I live in Newmarket and I'm very active all over the GTA.