Tuesday, June 12, 2007

View from the ground...

Condos that were selling for less than 100 k just 2 years ago are now being offered at $335k. Of course, it makes so much sense to 'invest' in these properties. It rents for princely $975 a month. Add on property tax of around $200 per month(may be more based on this new value) and $195 for condo fees, and you'll make a super $580 on investment of $335k. Wow a super 2% return.
But these numbers are for old fashioned, non believers in Alberta economy like me.
But then, I think these are the properties that will fall hard-falling by more than 50% in less than a year- like the ones in Fort Myers Florida.
But we are different. This apartment will soon start renting for over $2500 a month and there won't be any correction in Edmonton. Or, the condo will double in value again to make up for the opportunity costs!

But isn't it possible that this condo sells again for $100k or even less to bring the return on invested capital back to a more reasonable 6% or so?
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