I love the show Income Property but I am very concerned about the numbers people are given by Scott McGillvray. How on earth is he coming up with these numbers? In the episode "Successful Newbie Investors", Scott tells these new investors that it is 540,000 to purchase and reno, 1,625 mortgage payment, will bring in 1,700 in rent so they will live free and make $75 a month. WHAT? The numbers don't make sense and they are never explained, and they certainly don't talk about taxes and insurance. I think this is very deceptive to any new investor watching the show and thinking this is how the numbers work. The show should explain all the REAL numbers.
- Bob and Sue have a budget of 500,000. They have 120,000 cash and can qualify for a 4% mortgage.
- 380,000 over 30 years at 4% is a payment of 1,814 a month plus taxes and insurance.
House 1: 500,000 purchase and reno, $350 for taxes and insurance. Mortgage, taxes and insurance is 2,114 a month. Rent is 1,600. Bob and Sue will live for $514 a month. They will also be paying principal down as well as have tax advantages associated to income property. Not a bad deal at all.
These are the real numbers.
This question should apply to all shows that deal with the numbers. Gerald
Totally agree--the fuzzy math is very deceptive to the average person who watches the shows. The idea that renovations are completed and that they automatically up the value by a given amount is pure guesswork. No one should base their decisions on the numbers that are basically just estimates as to what the market would be if that home were up for sale.
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