Adding Basement Apartment, Loft, Tiny House Changes Cap Rates

By Bruce Firestone | Uncategorized

Jan 09

By adding extra elements to what is a standard executive home, you can change its value by a lot–from a capitalization rate of 3% pa to more than 7%.

That may not sound like a lot, but for a total home investment of  $704,900 it means big changes over time.

Here’s what happens over a 12-year period:

pp $704,900

cap rate 3% pa  yields $1,005,018.85

cap rate 7.6% pa  yields $1,705,210.97

mutual fund or bank savings plan or GIC 1.20% pa  yields $813,380.32

So if you put your money in a GIC at 1.2%, you’d only have $813k, 12 years from now. A standard executive home might yield just over $1m, but one with more revenue producing features could return a whopping $1.7m. That’s why real estate makes more sense than most of the alternative investment products out there IMHO.

For Sale

8091 Iveson drive, Ottawa ON 

List Price: $619,900

Feature Sheet: http://saragassocity.com/Images/Iveson-Dr-8091.pdf

Location: picturesque Country Hill Estates neighborhood/hidden gem of forested estate lots located in south end of Ottawa ON
Property Type:  Executive home on private 2.11 acre lot close to not 1 but 2 excellent golf courses. ”Energy Star” model-home bungalow, factory built to exacting standards with outstanding fitup and finishes. This home is at least 30 per cent more energy efficient than required by building code with advanced windows, sealed ducts, improved insulation and high-efficiency heating and cooling equipment. Two golf courses are minutes away. Builder providing buyer w/ family room, 1-bath lower level reno FREE.

Size: 3-bedroom, 3-bath home

8091 Iveson drive, 5-bed, 3-bath home on 2+ acres

8091 Iveson drive, 5-bed, 3-bath home on 2+ acres

image

Remarks: Builder is providing buyer w/ family room, 1-bath lower level renovation at NO additional cost. Bonus value of $40,000. Lot is 2.11 acres/plenty of room to add nature pond & other outdoor features. 20 mins to South Keys Shopping Centre. Huge loft in oversize garage provides ideal location for man cave/office/playroom/yoga studio.

Bonus features: 3-season sun room, fully developed lower level, loft space ready for development.

Additions? tiny house, pond clinic pond

Directions: from Manotick, head east on Mitch Owens road. Cross Bank street. Turn south on 8th Line road then west on Iveson. Look for 8091. 15 mins.

Brochure: http://saragassocity.com/Images/8091-IVESON-DRIVE-MLS.pdf

Spreadsheet: http://saragassocity.com/Images/8091-iveson-cap-rate-irr-with-tiny-house.xlsx

Slideshow: TBA

MLS #937222

Bruce M Firestone, Century 21 Explorer Realty Inc broker, Ottawa Senators founder

call: 613.422.6757 x 250

email: bruce.firestone@century21.ca

text: 6137628884

tweet: @profbruce @quantum_entity

http://www.brucemfirestone.com/

Making Impossible Possible

Spread The Word
Follow

About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.

>