Investing in an Ottawa Condo - How Much Rent Should You Charge?

If you are considering buying an Ottawa condo as a real estate investment, one of your many considerations should be the amount of rent you will charge each month.

A successful investment property will charge enough rent to cover the following:

• Mortgage payment
• Insurance payment
• Any included utilities
• Common expense payment
• An amount for maintenance
• An amount for vacancy

The bottom line is that you, the investor, do not use any of your own money each month to cover the expenses of your investment.  In fact, once the rental payment has been received by you and all of the expenses have been paid, there should be some money left at the end of the day.

The mortgage, insurance, and common expense payments are fixed amounts and easy to calculate. If any utilities are included, the best way to estimate this cost would be to calculate the total utility payments for the previous year and divide by 12. This amount should be covered each month by the monthly rent. The maintenance and vacancy amounts are a bit more difficult to calculate. If you want to allot a fixed amount per month for incidental repairs and maintenance, add that amount to the monthly rent. With respect to the vacancy amount referred to above, this refers to the number of months your unit may be vacant each year. If a new tenant will move in each year, you may experience a vacancy rate of 1 month each year, if the tenancies do not run together. If you think this will be the case, divide the rental amount by 12 and add this amount to the rent.

Charging a minimum rent of $1,606.81 will easily cover all of your monthly expenses and your investment property should carry itself. Once the mortgage has been paid in full, this monthly amount will become part of your profit on the investment property. Once you have a few investment properties without mortgages, it is easy to see how you would have a very attractive monthly income from your Ottawa real estate condo investments.