project 2. my next move. advice appreciated.

[TaylorSugar]

Okay

My first project was a 3BR 4WR Townhouse off-campus student rental.

I am currently trying to decide between a few different types of residential investments for my next project which I will also be living in.

Long term I would like to build a portfolio of rental properties.   Any advice would be appreciated.

Option A "STIGMA"Semi Detached 3+2 BR 2WR Home 250,000-275,000
1200-1400 SQFT

-rental neighbourhood has a bad stigma but there is high turnover on the rentals units now and new investors are improving properties to increase rents. This neighbourhood is in the downtown core and will experience gentrification over the next 25 years. The municipality is attempting to attract large condo projects and is facing a land shortage which will also push rent prices upward.
-walking distance to downtown core, train, bus, mall,
-20-30 Year Old Homes
-if I focused solely on this type of project I could purchase additional units every 8 months. Convenience of having all the properties in one area (for maintenance / monitoring) is a bonus as well as the neighbourhood's eventual rise in value.

financial
income: 950 + 140 Utilities
mortgage: 1387.65 [20 Year -  4% -  5 Year Fixed Term]
utilities: 280
taxes: 227.50

I would live upstairs in this property and rent the basement out.
net: -850.15/month [my personal monthly obligation] normally the main floors rent out for 1150+ 140 utilities [netting future properties that are completely tenanted at  484.85/monthly]
Eventually I would move into another property and rent the top out.


Option B "NEWER SEMI" 350,000-390,000 Semi Detached 1700-2000 SQFT
-Premier first time home buyer neigbhourhood, in demand
-3-6 Year old Homes, quality construction
-very few separate entrance basements - only a handfull in the whole neighbourhood
-beside bus transit and close to downtown core / mall

In this option I would live in the basement and rent out the main floor.

mortgage  1846.33
utilities 250
rent 1750
taxes 250
monthly 646.33 [my cost to live in the basement.]
fully tenanted the basement would rent out for 950+ 1/2utilities
leaving a net  353.67


OPTION C "BUNKER DOWN"
1200SQFT
In this option I would purchase a 3br 2wr co-ownership apartment for 150,000 in an old building on a big street w/ 24 hour buses.

30% Down Payment Requirement - not really  a bad thing because the idea would be to pay it off as fast as possible in order to have a lower cost of living to help me invest in bigger future projects.

15 Year Mortgage 996/month  [Less than I am paying now renting .


OPTION D Wait and See and Keep Renting 1000/month
Hold back and save more money to buy a multi-unit or mixed commercial/residential property next fall.


Thank you for any input.

Taylor

[redhawk]

WE are all with you on your goal to own a portfolio of rental properties. For this round of investing it seems that you will live there. Which of these projects would you like to live in? For me I would choose the house in a first time home buyer neighborhood. But I also like to live in a house by myself and family. It is difficult to intertwine the two goals. Investment properties and a home to live in = not the same thing.
redhawk

[TaylorSugar]

I understand the difference however I still consider it an investment property.
My "family" only consists of myself and my gf (who also pays me rent and wasn't included in the financials. She contributes 500. Monthly.

Since 75% of the occupants are tenants and I barely have any monthly obligation, It really is primarily an investment property.

Both home options are in first time buyer neighbourhoods and I am located in Canada.

My long term plan is to acquire an additional property every 8 months hold all the investments very long term. Deleverage properties in the growth periods and leverage in the decline. As well as a focus on 15-20 year ammortization periods with 5 year fixed terms.

Suprised I'm not getting more advice from the forum.
Maybe I'm asking the wrong question?

Taylor   

[davewindsor]

I understand the difference however I still consider it an investment property.
My "family" only consists of myself and my gf (who also pays me rent and wasn't included in the financials. She contributes 500. Monthly.

Since 75% of the occupants are tenants and I barely have any monthly obligation, It really is primarily an investment property.

Both home options are in first time buyer neighbourhoods and I am located in Canada.

My long term plan is to acquire an additional property every 8 months hold all the investments very long term. Deleverage properties in the growth periods and leverage in the decline. As well as a focus on 15-20 year ammortization periods with 5 year fixed terms.

Suprised I'm not getting more advice from the forum.
Maybe I'm asking the wrong question?

Taylor   

IMO move to another city.  That's a lot to pay for a rental property.  You can get 3-4 bedroom power-of-sale (or short sale as they call them in the States) houses in Windsor, Ontario, within walking distance of the University of Windsor that you can rent out to students for around $50K.  And, these are not semis, but free standing houses with decent size lots.  You can probably get around $300 a room.  You can build a much larger portfolio of properties much faster.  Detroit is right across the river, so you can pick up some great deals on both sides of the border. 

If you need help finding one or more in Windsor, let me know.

David
Realtor, Landlord, Investor

[TaylorSugar]

I would love to take advantage of that opportunity however I am operating a real estate sales business in the area which is currently the majority of my income.

Taylor

[TaylorSugar]

I think you are on to something about investing in different cities though.

Long term it would make sense to invest in a few different locations (Countries) etc..

It could be beneficial to both investors to do JV's with each of them managing the property local to them.  A little bit of diversification but you have to trust the other guy. Choosing a JV Partner is crucial. you also have to have the same long-term plan.

Taylor

[WholesaleKid]

who manage your properties? ( to all )

[justin0419]

Me.  No one cares more about my properties than me.  There's also no one else to blame when things go wrong.