Yeah, the relative stability of real estate is why I am interested in using my profits from my online business. The stuff I do is so volatile that I may have to do a $5,000 minimum media buy spend, and end up making only $20 in revenue, and so within a few days I've already lost $4,990. And with revenue-generating websites, while a hell of a lot more stable, it's still vulnerable to stiff competition and changing trends. Just look at MySpace.
May I ask, as both a realtor and a real estate investor, do you not find yourself in a conflict of interest, especially in a small city such as Nanaimo? Would financials be the only thing from preventing you from taking up all the good investment deals, and leaving the 2nd-best deals to your clients?
I'm still open to what I may be looking for, and I am still waiting to sit down with my accountant and crunch some numbers around (waiting on corporate year-end to finish first), but I am leaning towards a duplex, triplex, or 4-plex.
I've been looking at this one a lot:
http://www.icx.ca/propertyDetails.aspx?propertyId=...
Listed (unverified) gross income of $43,380.00 and expenses of $12,990 leaving revenue of $30,389.00. It's unclear what expenses include, but I presume it covers most of the basics such as water/sewer/garbage, hydro, and basic maintenance, but likely doesn't cover costs such as property management fees, improvements/upgrades (if any), insurance, taxes, etc.
With a list price of $509K, let's say I got it for $480K and put down 25% ($120K). Ignoring the closing cost fees and going straight to the cashflow, the bi-weekly mortgage would come out to $786, so around $1,600 a month.
Using the gross income of the property, it works out to $3,615 a month, an average of $900 per door per month.
Utilizing the ROUGH gauge of the 50% rule (which is why I'm using the gross income here), and not factoring in 10% property management fees (which I'm not sure if the 50% rule considers), that leaves $1,807 to pay for the mortgage, which leaves around $200 a month profit.
Now, when you factor in additional safety padding costs and taxes, I'd basically be breaking even more or less it appears (albeit building equity; although slow equity on a 30-year amortization!).
Alternatively, I could straight-out bought a condo unit such as this one: http://www.realtor.ca/PropertyDetails.aspx?&Proper...
Let's say I bought it at $115K. It's renting at $825 (although that seems a little high to me for those apartments). I think that $200 strata for that place is fairly conservative. After a 10% property management fee, and let's say 10% for vancacy times, that leaves me with around $460 a month. Let's knock off 10% more for paint, move-in fees, etc. That's $377.50 a month profit before taxes. I might be missing some costs here... insurance I guess but that's pretty cheap on condos. Like $150 a year I think.
The cashflow is slightly better on the 2nd example, and is more risk-free in that I wouldn't have a mortgage, but the first example may benefit from forced appreciation and inflation.
In either case, the cashflow would be so miniscule...
