However, I think it's unrealistic for 3 reasons.
1) It implies a net return of only 2.6% on the condo, which is low. Therefore, the true rent should be higher.
2) Yes the tax rate on $40,000 might taxed at a 35% personal rate but in reality, that $40,000 income will probably push the Tenant into a 50%+ rate. Therefore, the actual return should be less.
3) The mortgage fund gives a return of 8%....don't you think that fund may be a little on the risky side??? I think it overstates return while understating the risk involved.
Sorry, I'm not at all convinced. Not in the least.
