Investors - New Build Profit Calculator

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u/mtlprop · Joined Oct 2024

Wondering whether to seize or skip that new construction deal? Use this calculator to uncover your investment's value in Quebec—before and after delivery!

Last update Nov 2024
  • Scenario 1: Seal the Deal
  • Scenario 2: Pass and Invest
  • Which One Is Higher (%)

Assuming you're in good standing and ready to close, this chart compares your projected Net Worth for an appreciating asset versus investing in the market, factoring in property value and returns on down payments and principal payments.

# Years from Now

Try your numbers:

Input the price agreed upon with the builder. Note: For investors (non-primary residences), the full GST (5%) and QST (9.975%) will apply.

A =

Estimate the property's current value as if delivered today, based on comparable home prices in the area. This should reflect the after-tax price typical in owner-to-owner sales.

B =

Enter the amount required at the time of signing the contract.

C =

Input your estimated mortgage interest rate that will apply starting at delivery.

D =

Enter the expected rental amount a tenant is likely to pay. Exclude additional costs (like turnover and vacancy) from this figure. This amount is assumed to track inflation.

E =

Input the estimated monthly cost for property maintenance.

F =

Specify the projected timeframe for construction completion and delivery.

G =

Enter the estimated annual appreciation rate for this new construction.

H =

Input your current marginal tax rate.

I =
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Add Input
  • Amount
    Any single amount ($).
  • Cash Flow
    Rent, insurance premium, salary, ...
  • Current Asset
    Real estate, commodity, bonds, ...
  • Installment Loan
    Mortgage, car loan, ...
  • Percentage
    Any percentage value (%).
  • Years / Months
    Any time horizon.
  • Age
    Show "Age" instead of "# Years from Now."
  • Retirement Age (requires Age)
    Enable "Investment Return After Retirement."

Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

In the "Seal the Deal" scenario, we assume a 20% down payment, including the Welcome Tax, 6% closing costs, and 0.9% annual municipal/school taxes. Capital gains taxes are calculated for both the property and rental income investments.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

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Õ =
∞
Follow Inflation
P̃ =
∞
Follow Inflation
Q̃ =
∞
R̃ =
Now
S =
0

Calculations

(Expressions are evaluated at every year.)

T =
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Z̃ =
AA =
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Add Decision or Expectation
  • Buy Asset
    Buy an asset growing at its own rate.
  • Take Installment Loan
    Take a mortgage, loan, etc.
  • Invest
    Receive/Spend a lump sum.
  • Expect to Invest
    Expect to receive/spend a lump sum.
  • Expect Monthly Cash Flow
    Expect to receive/spend cash monthly.
  • Expect Yearly Cash Flow
    Expect to receive/spend cash yearly.
  • Define Variable (Numerical)
    Calculate an intermediate value.
Add Intermediate Calculation
  • Define Variable (Numerical)
    Calculate an intermediate value.
  • Define Variable (Cash Flow)
    Calculate a combined cash flow.