Enter Info Here
                 
    Should I invest in Real Estate or Stocks?  
    Understand the financial impact when comparing a rental condo investment, versus holding a group of stocks over 10 years. Which option will grow my equity faster? How will my investment be impacted in the current conditions?

For this example, we use a Stock Index ETF that will automatically maintain a broad based group of stocks.

Plug in the information, and then check out how your wealth stacks up by Year 10. 		 
    Instructions: Fill in the 'Yellow' fields, then review the 'Business Case Summary' tab  
                 
    Option 1: Invest in Real Estate  
    1. What are your transaction and start-up costs?            
    Purchase Price          
    % down payment          
    Down Payment          
                 
    Legal and Regulatory Fees          
    Renovation and Repairs          
    Other Fees and Expenses   Add as required (e.g. Inspection)  
    Land Transfer Tax $   Check your government guidelines and calculators  
                 
    Annual property growth rate   US / Canada 20-year historical ranges are ~3-6%  
                 
    2. What are your mortgage details?            
    Mortgage Insurance   *If required, usually applies to down payments <20%  
    Mortgage Amount          
    Interest Rate   Assumes this average rate over 10-years  
    Term (years)          
    Monthly Mortgage Payment          
                 
    3. What is your estimated rental price and expenses?            
      Monthly $   Growth Rate (Yr.)      
    Rental Estimate        
    Property Taxes        
    Maintenance Fee        
    General Repair Allocation        
    Property Management Fees        
    Occupancy Rate   *Assumes full occupancy, adjust downwards as required.  
    Fee to find a tenant   *If using a Realtor, enter the estimated fee. This will be averaged out over 3 years.  
    Alternative Investment / discount rate   A low risk alternative investment (e.g. Bonds, GIC, High Interest Savings Account)  
    4. Are there any monthly utilities the Landlord (you) will pay?            
      Monthly $   Growth Rate (Yr.)      
    Water     *Utilities and content insurance are usually paid by the tenant. If you are paying any of these costs, then include an estimate where applicable.  
    Electricity      
    Heat      
    Internet      
    Content / Tenant Insurance      
    Option 2: Invest in a Group of Stocks  
    Assumes a 10-year investment in the S&P 500 Stock index ETF. This is common investment recommendation.          
    Investment Amount          
    Purchase Fee   One-time brokerage fee for an up-front purchase.  
    Annualized Return   50-year annualized return for the S&P 500 index.  
    Management Expense Ratio   Based on fees of various S&P 500 ETFs.  
    Once your inputs are captured, review your analysis on the 'Business Case Summary' tab.
You can always return here to make updates. 		 
                 
 
           
                                 
    Business Case Summary        
    1        
    2        
    3 Interested in the details? You can dive into the breakdown in the 'Business Case Details' section.        
                                 
    10-Year Equity Comparison            
      Investment Options   Real Estate Investment   Group of Stocks   Difference              
      Initial Investment                    
      Start-up Fees & Expenses                    
      Net Income or Fees                    
      Principal Repayment      $                             -                  
      Asset Appreciation                    
      Gross Equity                    
      Net Equity                    
      Annualized ROI                    
                                 
    ROI Comparison        
      Return on Investment (ROI)   10-Yr Growth ($)   10-Year ROI   Annualized ROI %   Annualized ROI % (Discounted)          
      Real Estate                  
      S&P 500 Stocks ETF                  
                                 
    Real Estate Cash Flow Over Time        
      Real Estate Cash Flow   Month 1   Year 1   Year 5 (Cumulative)   Year 10 (Cumulative)          
      Revenue                  
      Expenses and Interest                  
      Mortgage Principal                  
      Net Cash Flow                  
      If rental rates increase faster than expenses, cash flow will improve over time.          
    This business case serves as a starting point for your analysis. You should carefully evaluate your assumptions and current market conditions. Review this with your financial advisor or accountant to help you make a decision.        
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Numbers Matter 		       
                           
                                 
                                 
                                 
                                 
                       
    Business Case Impacts of Option 1 and Option 2  
    Each key point has the details expanded further below.

This analysis provides directional guidance. You should review these decisions in detail with your financial advisor or accountant. 		 
     
    1.1  
    1.2  
    1.3  
    1.4  
    1.5  
     
    2.1  
    2.1  
                       
                       
     
    1.1 Estimated Investment and Transaction funds required to close the deal          
      Investment Funds / Equity     Upfront $      
                 
                       
      Transaction Fees and Expenses     Upfront $      
                 
                 
                 
                 
        Transaction Fees and Expenses total          
                       
      Investment and Transaction funds total          
             
    1.2 Estimated Monthly and Annual Cash Flow            
            Monthly   Year 1      
      Rental Income Estimate        
      Expenses              
        Operating Expenses            
                 
                 
                 
                 
            Spread over 3 years  
        Financing Expenses            
          Mortgage Interest        
        Landlord Paid Utilities            
          Water        
          Electricity        
          Heat        
          Internet        
                 
        Total Expenses          
      Taxable Income          
        Less Mortgage Principal        
      Net Cash Flow        
             
    1.3 Break-even Analysis            
            Estimate   Break-even value   Delta  
      Max Offer Price to Break-even      
      Minimum Rent to Break-even      
                       
    1.4 Cumulative Equity Growth over 10 years            
      Equity Growth Areas Year 1   By Year 5   By Year 10  
        Start-up Fees and Expenses      
        Operations Cash Flow      
        Mortgage Principal Repayment      
        Capital Appreciation      
      Equity Growth      
                       
      Personal Equity Position            
        Down Payment          
        Gross Equity      
             
    1.5 Annualized Return on Investment (ROI)            
      Benefit Areas        
             
             
             
             
      Annualized ROI (rounded)      
                       
           
                       
                       
     
    2.1 Estimated Investment and Returns            
      Investment Funds / Equity          
      Uses the same upfront cash outflow as the condo (see 1.1)            
                       
      Equity Growth Year 1   By Year 5   By Year 10  
        Starting Value      
        Growth        
        Fees        
        Ending Value      
      Net Equity        
                       
      Return on Investment (ROI)            
        Annualized ROI      
        Discounted ROI      
                       
                       
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Numbers Matter