I must be feeling some added confidence lately, or it's the lovely Spring rain that's got me in the mood to take the gloves off and go after individual advertisements in town.
Today I'm right pissed at some deceptive bs coming from none other than Sooke's fabulous development on a bog: SunRiver Estates.
Several weeks ago, they started a Suite Deal! advertising push that showed how you can get into a home "cheaper than rent" (they claim) if you have 25% down, amortize over 40 years and have tenants in your 2 bed basement suite. Fair enough. But over the weeks some things have changed, but others have not. Your out of pocket expenses haven't changed apparently, despite a 0.25% jump in interest rates. How'd they do that?
Simple. They just upped the rent you'd charge your tenants. If only it were that simple.
The first add I noticed claimed a monthly rental income of $848. I didn't balk at that too much. You can't get a similar brand new 2 bed suite in town for that price. I figured there may be some Langfordites that would be willing to pay that and have a 20-minute commute to work. But when interest went up, strangely enough, so did the rental market value in SunRiver. Now that $848 is $950. That's over 10%. And that isn't reflective at all of true market value for similar suites in Sooke.
I couldn't find any vacant SunRiver suites to see what they are actually asking. But if only it were that simple that you could just assume that kind of debt no questions asked. Too bad you won't qualify for that at the bank. If you show up at the bank counting on rental income to make your mortgage payments, as I understand it, they will only accept it with a one year signed lease guaranteeing the payments, and they only count half the rent as actual income.
The most brilliant thing about their pricing though, is with an unfinished suite roughed in, you save $20K in purchase price. Want them to complete it for you? Pay the extra, no problem. Except that the actual costs of finishing that space according to a contractor I know, closer to $10K without cheaping out on appliances and furnishing's. He figured he could do up that SF on the cheap for $8K. If you are at all handy with finishing, you could self contract the drywall and taping, paint and finish yourself, get your flooring installed professionally, and the cabinets, and you could get it done for closer to $6K.
Ah, the things they just don't explain to you in advertising.