Domaine Le Sanctuaire des Lacs: Waterfront Real Estate
 


Home
About Us
Lakes
Nearby Activities
Building your Home
Links
Property Prices
Conversion Calculator   
 

Investment in Land

An investing in land is a safe investment. As more and more people from Montreal are looking to get houses in the country. New developments are mushrooming to meet this demand. Much land is still available in the Laurentians, even a variety of lakefront properties, but prices are rising and all of the best spots are quickly being bought up. Given past trends, it seems inevitable that land prices will continue to increase. Real estate values have risen by 40%-45% in the Laurentians in the last ten years.

Here is an example of a property investment at Domaine Le Sanctuaire des Lacs. In this example, the buyer does not build on the land for the time being, and could resell the property in five years for a theoretical profit reaching new heights. Especially given the speculation and growth associated with the new economic conditions (CITW)

Sample Five-Year Investment Profit Statement

COST OF SALES

 

Land (125,000 + GST + QST)

$ 143,718

 

 

OTHER EXPENSES

 

Interest for 5 years @ present 3.5% (Note 2)

$ 8637

Municipal and School taxes (680+200 per year)

$ 5,000

Estimated Association Fees (1850/year average)(Note 2)

$ 8,250

 

 

TOTAL EXPENSES

$ 182,132

 

 

Sale of Land in 5 Years (Note 3)

$ 240,824

Net Profit after 5 years (approximate return per year)(Note 4)

$ 58,692

Note 1: Interest is on mortgage loan, based on a $75,000 loan ($71,737 down payment) see chart for other interest rates.
Note 2: Association fees are tax deductible on personal return. Fees are based on a projected annual average. This estimate is based on the actual budget of approximately $90,000 divided amongst the 60 owners in 2019. As long as land is being sold we estimate that in 5 years there should be between 70 to 75 owners.
Note 3: 10% Appreciation (although present rate of appraisal is 15-20% see chart of appreciation rates.
Note 4: 48,779/109,806
Note 5: Only half of the profit will be taxed as it is considered a capital gain.

CASHFLOW NEEDED:

Yr 1

Yr 2

Yr 3

Yr 4

Yr 5

Total

 

 

 

 

 

 

 

Land Purchase

75,000

 

 

 

 

 

 

 

 

 

 

 

 

Loan payments (principal and interest)

4,032

4,032

4,032

4,032

4,032

20,159

 

 

 

 

 

 

 

Municipal and School taxes

1000

1000

1000

1000

1000

5,000

 

 

 

 

 

 

 

Association fees

1,650

1,650

1,650

1,650

1,650

8250

 

 

 

 

 

 

 

TOTAL

81,682

6,682

6,682

6,682

6,682

108,410

Other considerations:
1) Only half of profit will be taxed as is considered a capital gain.
2) Land in the meantime may be used for personal reasons (beach, fishing, canoeing)
3) see association ruling.

Building
Building a house on your property has further advantages. For example, the land mentioned above but with the addition of a house costing $150.000 minimum to build has a potential higher immediate resale value. Even though your total costs are $375,000, this property could sell for up to $450.000 right away (depending on market conditions). See more details on building a home.

 

Interest table

25 year loan of $75,000


Caisse Desjardins de la Vallée de Saint-Sauveur


Interest rate

2.5%

3.5%

4.5%

5.5%

Monthly payments

$335.98

$374.46

$415.10

$457.79

Interest paid in 5 years

$8,636.91

$12,177.11

$15.753.57

$19358.24

principal paid in 5 years

$11,521.89

$10,290.49

$9152.71

$8109.37

 

Appreciation rates

Appreciation

10%

12.5%

15%

17.5%

20%

Purchase price

$ 149,533

$149,533

$149,533

$149,533

$149,533

First year

$ 164,486

$168,225

$171,963

$175,701

$179,440

Second

$ 180,935

$189,253

$197,757

$206,449

$215,328

Third

$ 199,028

$212,909

$227,421

$242,578

$258,393

Fourth

$ 218,931

$239,523

$261,534

$285,029

$310,072

Fifth year

$ 240,824

$269,463

$300,764

$334,909

$372,086