Anne Marie Lorusso, sales representative

A newly renovated triplex came on the market today – November 15, 2010.  This is another example of home that you can purchase and live almost for free.  The list price is $499 900 and it has 3 separate fully renovated units that are separately metered.  The main and second floor one-bedroom units would each conservatively rent for $1000 per month, if not more, and the basement for at least $800.  Hence, you could live in the ground floor unit and enjoy the backyard space while you rent out the upper and basement units for a total of $1800 per month. 

The mortgage of $450 000 (with 10 % down) which would carry for $1560 per month based on a 35-year mortgage with a 5 year closed term of 3.29% works out to $1800 – or $1560 at an open variable rate of 2.30% (both OAC.)  The taxes are about $225 per month and your utilties would likely be between $75-$125 per month.  Hence, the rent coming in totaling $1800 per month covers your mortgage (either way) and your taxes, leaving you with only your electricity bill to pay monthly.  The best part of this house is that it could be CASH FLOW POSITIVE if you didn’t want to live in it but wanted to rent it out and pocket the $1000 per month excess funds.

The location is just south of King & Springhurst which is just south of Dufferin.  You will be steps to Liberty Village and overlook the CNE grounds.  This means you are steps to the GO station at the CNE and steps to the King TTC streetcar line which runs 24 hours a day, not to mention minutes drive to the Gardiner Expressway and Lakeshore Ave W.

Call me to go see this gem.

ASKING $399 900 & SOLD for $390 000.

Located in Toronto, this Montreal-style duplex way up on a hillside is located steps to Hillcrest Park and near Wynchwood Park.  This 2 1/2 storey semi-detached house has two private two-bedroom apartments and a lovely backyard with a huge platform deck.  This house is going to be listed on the market for mid-September 2010.  

The upstairs apartment was recently rented for $1100 per month (plus 1/2 the utilities) and the downstairs for $1200 per month. 

What does this mean to you? 

If you have 5% down (about $22 000) your mortgage would be $1377 based on an open variable mortgage rate of 2.25% spread over 35 years paid monthly.   (OAC) 

If you put 10% down (about $45 000) and go with the conventional closed mortgage for 25 years (vs 35) your morgage would be $1670 per month.

Take away the rent from the upstairs apartment and you are living in your own 2-bedroom apartment for between $200-300 per month plus property taxes of approximately another $225 per month and utilities.  All in all you could be living in your own ground floor apartment with a backyard for well under $900 per month.

Features:

* hardwood floors, French doors & high ceilings on both floors
* Kitchen with dishwasher
* walk-out to a private garden with a garden, trees and patio
* washer & dryer (no coins required)
* TWO full washrooms

       

My own downtown duplex is fully rented out and is cashflow positive.  My personal residence is split up as a duplex too.  I live in a great private apartment on the ground floor with parking and the backyard to enjoy while the rent from the upstairs one-bedroom apartment covers about 75% of my mortgage.   It’s a great way to reduce your monthly living costs (versus renting) while gaining equity.    Hence,  I always keep an eye out for, and regularly find, potential cash-flow-positive properties for myself and my clieints.  

As of 3pm today, August 18th, there are currently 21 listings on the market in the “Annex” area which could provide someone with a great income or a great place to live economically and sometimes for free while tenants pay-off their mortgage. 

Call me for a FREE sit-down consultation where we can look actual properties and discuss how this can be a reality for you.

I am often asked “what do you do?” and I say “real estate.”  That usually leads to people leaning in closely to start asking questions.  Everyone seems to know someone in the real estate business but the truth is that many real estate sales representatives can barely make a living in the business, especially in downtown Toronto.   Hence, solid well-founded good advice is hard to come by.

I have a friend in her 30’s that has been renting a basement apartment for many years for $900 per month, remained relatively frugal with her lifestyle and, as a result, saved up $50 000.  She’s been dreaming of buying herself a convertible BMW and continues to ask me if she should use that money to buy it free-and-clear or if she should use it on a down-payment on a house.  I love a nice car but I’m not big on buying a depreciating asset in lieu of something that could be making me money month after month while I live for free.

We’ve had this same conversation over and over for years.  My answer never changes.  In fact, I’ve been able to show her how, just in the past 5 years, she has missed out on more than one opportunity to be living for free.  She could have had BOTH her dream BMW and a house that could be gaining equity while providing her with an equal quality apartment to live in.

I showed her a small 3-bedroom house costing $435 000 that had a basement apartment which was equally nice to the one she currently lives in.  I explained how she could put a $43 000 downpayment (which she had saved) on the house and end up living in the basement for free.    The upper/ main part of the 3-bedroom house would easily rent for $2500 per month while the mortgage would cost about $2050.  Taxes run another $300 per month.  Utilities would be extra for the tenants – which she could split with them 70/30.  Hence, all-in-all, she could be living in that basement apartment for free…and use her previous $900 per month rent towards the BMW she always wanted.  I also reminded her that the house will be getting paid off by the tenants and gaining in equity month after month, year after year.  I explained that, eventually, she may want to simply move upstairs and rent out the basement or rent out the basement and move on to another home where she can occupy the whole house and have her mortgage subsidized by that first house basement rent of about $900 per month (today’s rent.)

Here’s how that works…

List price:  $435 000, downpayment of $43 500 (or 10%), open variable mortgage of 2.6% (at that time),  over 35 years paid monthly = $1451 per month.  I reminded her that she could easily make yearly balloon payments with the extra money she may save during the year to knock down the principle only – rather than paying a higher monthly amount which only goes towards interest anyway.  Then, in a year or two or five, if/when she decided to lock into a fixed mortgage, she would probably end up with a lower mortgage amount owing than had she of paid the conservative amount during that same time.

or going the ‘conservative’ route….

List price:  $435 000, downpayment of $43 500 (or 10%), closed mortgage of 4%, over 25 years paid monthly = $2112 per month