• Sherwin Park Industrial Condos in Winnipeg, Manitoba

OWNING VS. LEASE

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OWNING VS. LEASING YOUR INDUSTRIAL SPACE

There are various reasons why owning your space is beneficial as opposed to leasing. The information below describes the benefits of becoming an owner of your industrial space.

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    Growing Equity

    By investing in real estate, you will be able to create equity.

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    Rental Hikes

    Rental hikes will not be a concern and mortgage rates are currently fairly stable.

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    Management Fees

    Decided by the condo board which you can elect to be a part and participate in annual meetings.

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    Improving Space

    Improvements completed will increase the value of your investment, thus increasing the equity value.

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    Long Term Benefit

    Property becomes an investment under your control, giving you an option to sell with or without your business or rent to a user for additional income.

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    Growing Equity

    While renting, you cannot create equity through property, thus no long term economic benefits are attained.

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    Rental Hikes

    Rental hikes are beyond your control and left to the Landlord and market to decide.

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    Management Fees

    Controlled by the Landlord/Management company, beyond your control.

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    Improving Space

    Improvements become part of the space resulting in possible rent increase.

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    Long Term Benefit

    No economic benefits will be carried forward once the lease ends and you no longer occupy the unit.

LEASE VS. OWNERSHIP ILLUSTRATION

Lease
Year 1 Year 2 Year 3 Year 4 Year 5
Net Rent psf
$8.00 $8.00 $8.00 $8.00 $8.00
Operating Costs psf
$4.30 $4.30 $4.30 $4.30 $4.30
$12.30 $12.30 $12.30 $12.30 $12.30
Annual Rental Payments
$65,522 $65,522 $65,522 $65,522 $65,522
Monthly Rental Payments
$5,460 $5,460 $5,460 $5,460 $5,460
Own
Year 1 Year 2 Year 3 Year 4 Year 5
Interest
$45,000 $44,057 $43,067 $42,028 $40,936
Principle Repayment
$18,857 $19,800 $20,790 $21,830 $22,921
Annual Mortgage Payment
$63,857 $63,857 $63,857 $63,857 $63,857
Monthly Mortgage Payment
$5,197 $5,197 $5,197 $5,197 $5,197
Estimated Annual Condo Fees
$22,906 $22,906 $22,906 $22,906 $22,906
Estimated Monthly Condo Fees
$1,909 $1,909 $1,909 $1,909 $1,909
Monthly Mortgage & Condo Fees
$7,230 $7,230 $7,230 $7,230 $7,230
Monthly Principle Reduction
$1,571 $1,650 $1,733 $1,819 $1,910
Net Monthly Ownership Cost
$5,659 $5,580 $5,498 $5,411 $5,320

*Mortgage Estimates

Monthly Comparisons
Year 1 Year 2 Year 3 Year 4 Year 5
Lease $5,460 $5,460 $5,460 $5,460 $5,460
Own $5,659 $5,580 $5,498 $5,411 $5,320
Mortgage Assumptions
Unit Size sf
5,327
Unit Sale Price psf
$168.95
Purchase Price
$900,000
Loan to Value Ratio
100%
Mortgage Available
$900,000
Mortgage Rate 5 Year Term
5%
Mortgage Amortization (years)
25
Mortgage Term (years)
5
Condo Common Element & Taxes psf
$4.30

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