2016 Rental Income
In April 2016, we started to collect income after renting our condo in one of the Vancouver suburbs.
In 2016, the annual income from the rental property was 13,050 CAD, and the profit was 2,601 CAD before taxes.
However, there is another view on the real income of this property.
Here is a price breakdown of the overall price of the condominium:
- Price: 262,900 CAD
- Price with taxes: 271,313 CAD
- Down payment: 54,262 CAD
- Mortgage: 217,050 CAD
To buy the property, we took out a mortgage of 217,050 CAD at a 2.4% variable rate. We could have gotten a better rate, but our first experience with mortgage brokers did not go smoothly. After renting the property for 1,450 CAD per month our profit before taxes was 289 CAD.
- Mortgage: 916.26 CAD (includes property tax)
- Strata: 176.23 CAD
- Property management: 68.25 CAD
After paying our mortgage for nine months, the remaining balance on our mortgage was reduced by 4,332 CAD, i.e. the new remaining balance on the mortgage is 212,718 CAD compared to the initial balance of 217,050 CAD.
Overall, the rental profit is 2,601 CAD + 4,332 CAD = 6,933 CAD without taking into consideration the price appreciation of the condominium. It looks like a very good business, and we are thinking about investing more in real estate. We earned 12.78% on a down payment of 54,262 CAD within nine months. This is a very good return on our investment!
Because it is the Vancouver area, condo price appreciation can be used as a down payment for the next rental property.