An exercise in the 5-year return on investment on your Calgary/Cochrane home purchase...
Let's say you purchased your home in October 2018 for $400,000, with a 5% down payment (i.e. $20,000 initial investment).
● Calgary homes have appreciated in value by an average of 6.82% per year over the past 5-year period; Cochrane homes have appreciated by an average of 5.40% per year over that same period.
● Adjusting for compound appreciation, in October of 2023 your Calgary home is now worth +/- $556,318; your Cochrane home is now worth +/- $520,311.
● Keeping in mind that your initial investment was $20,000 (i.e. down-payment on your $400,000 home purchase), we calculate the gross ROI as follows:
- Calgary home: (2023 market value - 2018 purchase price)/$20,000 = ($556,318 - $400,000)/$20,000 = 781% overall gross return on initial investment of $20,000.
- Cochrane home: (2023 market value - 2018 purchase price)/$20,000 = ($520,311 - $400,000)/$20,000 = 602% overall gross return on initial investment of $20,000.
While gross return does not take the cost of living in/maintaining the home into consideration, it is clear that Real Estate provides one of the highest returns and the least comparable risk in the world of investments. As Mark Twain once said, "Buy land, they're not making it anymore."
Know of anyone looking to buy or sell a home? Please send them our way; both you and they will be happy you did!