TEK Tower (30 Francis) | 45 fl | U/C

[tomh009]

Especially since a lot of new rental stock will come onto the market before then. In downtown Kitchener alone there will be the Bow (aka Arrow 2), Civic 66, Ophelia, Drewlo,  387 King St E and Woodside phase 2 -- and a lot more in the East End.

I think most of those investors will be cash flow negative and just hoping for appreciation.

I doubt it. We still have a serious housing shortage in Kitchener, and that isn't going to change with a handful of building coming online in the coming year. What it might do is depress prices a little bit with the more rundown and older buildings.

OK, let's do some quick math. Let's say you buy a modestly-sized 400 sqft 1BR unit at Station Park B or at TEK, for about $450K. At about 3%, your interest costs will be $13,500 per year (and rates may climb substantially given current inflation). You'll spend $2500 on condo fees and about $4500 on property taxes. That's the bare minimum, and it means you are spending $20,500 per year (or $1700 per month) on costs (no mortgage principal yet). Add in paying for a property manager (unless you are going to do that work yourself for "free") and some budget for repairs/maintenance. And you'll quite likely have some months between tenants, too.

You can make money given a sufficient increase in property prices (by the time you sell). But, at these prices, I highly doubt you can be cash flow positive during your period of ownership.