2017 in Review and FI Update

Wow… I can’t believe 2017 is already over.  In a way I feel like it flew by but in another I’m amazed at all we were able to accomplish. 

  1. We purchased our first rental property (4-plex) and completely renovated 3 out of the 4 units, raising rents by over $600 and now cash flowing almost enough to sustain our lifestyle on just this one property.
  2. We finished the basement and added a 4th bedroom in our gigantic mansion house and staged it in a short 8 week period then put it for sale.  Sold the mansion and made a very generous profit.
  3. We purchased our second rental property (triplex).
  4. We purchased our FI home and are about half way through the renovations.
  5. Refinanced our 4-plex and withdrew $35,000 to put into savings/investments. Equal to the amount of money we spent renovating it so far.

All of this was done while continuing to accumulate a huge amount of savings by spending less than 30% of our net income.


We are now 4 months away from FI and project having a net worth of approximately $600,000 by then.

4 Plex Cash Flow Update

Earlier this year I posted an article about the 4 plex we purchased.  There were some expenses we had not accounted for and with the renovations we’ve done there are additional revenues and savings realized.  So here is a revised cash flow summary.

Mortgage $879
Water $263
Heating (2 units heat with hydro) $150
Hydro $400
Property Tax $210
Insurance $196
Total Expenses $2,098
Total Rents $3,687
Monthly Cash Flow $1,589
Annual Cash Flow $19,072
When Assuming 4% Vacancy $1,770
$300 a month for Repairs and Appliances $3,600
Annual Profit $13,702
Annual with Mortgage Paydown $18,302

When we purchased this property we had about $100 in hot water tank rental fees (3 tanks). We have since purchased new tanks which are more efficient (using less gas) and cost nothing to rent. Based on my calculations, purchasing a new tank vs. renting one pays itself off in under 5 years and the tank is supposed to last 15 years.  So even with some potential repairs or issues between years 10-15 you still come out way ahead.

We installed new high efficiency electric heaters in two of the units and installed a brand new gas space heater in a unit which all contributed to reducing our heating and hydro expenses. The above heating and hydro costs are based on annual averages so far based on our projections and they are conservative numbers (meaning on a good year, we could pay less than this).

Other than renovations, we haven’t experienced any vacancies.  We had one tenant leave and we were able to line up a new tenant with no gap in income. With our active management style and the high demand in this market for rentals, I anticipate our long term vacancy rate will be much less than 4%. We are also allocating a very generous amount to general repairs and appliances.  Since we have been purchasing all our appliances on Kijiji so far, we pay very little (normally about $100 each).

So in summary, a conservative estimate puts our cash flow at $13,000 a year.  Our second rental property has similar numbers (an update on that one later). In a nutshell, these 2 properties will sustain our basic living expenses on any given year as we are projecting our basic lifestyle expenses at under $25,000/year.  All while paying off the mortgages on these properties.  So our FI plan does not involve using any of our investments/savings other than potential emergencies and not touching the equity in our properties.  Our net worth will just continue to climb indefinitely.

We essentially designed and put all the pieces of our FI plan in one year.  This is how easy it can be!!

CCB Update

One thing I discussed in a prior article is the great benefit we have in our country called the Canadian Child Benefits. We are not counting on this benefit for our basic living expenses as it would be risky since these programs can get changed/cut with changing governments. But we will definitely maximize our entitlements under this program as much as we can and use the money to add to our savings and bring the kids on amazing vacations.

The CCB is payable to families with kids under 18.  We have strategically invested a lot of money in RRSPs in 2017 (using prior year unused room) in order to lower our 2017 income and start receiving higher CCBs in 2018.  We are projecting to start receiving $400/month in July 2018 from this program.  Then in 2019 we will start receiving $800-900/month. And beginning in 2020 we will be receiving $1,000/month.

Blog Update

This blog has been a lot of fun and has definitely exceeded my expectations.  I was thinking that I would just have a few readers and I would be really happy if I could maybe get a 100 page views.  In the first 3 months, I have been able to reach over 1000 unique readers, with over 5000 page views with a pretty active engagement and following.  Thanks to everyone who continues to follow along and provides insightful comments!



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