Quality Maintained and Improved Homes
A home like any physical structure will deteriorate over time and require repair. Each component that makes up a home (other than the land it sits on) has an expected lifespan when if properly maintained, it should be relied upon to last. Some components have short expected lifespans requiring frequent repair or replacement while others can be expected to last decades, if properly maintained.
Consumers tastes over time continue to demand a higher and higher quality of home to be sought out and purchased. In order for an existing home to maintain it's opportunity to be considered against newer and more modern options, improvements to any home must be made or very quickly that magazine quality new build can become a tired 10 year old home no one really wants. Only between 3 or 4 homes in 10 listed for sale in Canada ever sells under the terms they are listed under. The homes that do sell are the 3 or 4 best choices of the 10 available, each offering the most value for the home buyer's dollar. To achieve those top selling prices any home must occupy those top 4 spots with their QMI.
QMI is the professional measure used in our calculations.
RMR is the consumer measure and although serving the same purpose can be used only for the specific home is was designed.
RKRC is able to create a QMI for any home and without any bias or prejudice. Buying a home without knowing what your QMI expense estimate is, would be like buying a used car without looking under the hood or checking it's service history records.
As interest rates fall your QMI expense requires a higher and higher share of your after tax income being spent as part of the cost of owning a home. QMI is also important in it's percentage of total ownership costs when buying a home with a larger and larger down payment being used while maintaining a maximum GDS or TDS approval. As a general guideline, but not to be relied upon for accuracy, approximately 60% of a home's components will be replaced on average one time during 25 years home ownership. Those components will increasingly cost more and more aligning almost 100% with inflation. The Improvements that will be necessary to improve your home and allow you to maximize it's selling price are generally another 0.8% per year.
The General formula for your QMI expense over 25 years will end up being an annual expense of 3.5% of the original purchase price being expended. This calculation includes the impact inflation will have on replacement costs leaving the following amount to be included in your 25 year ownership expense estimation.
Purchase Price x 3.5% x 25 = QMI projected expense
$100,000 x .035 x 25 = $87,500
$3500 per year already inflation adjusted to purchase date
You need to plan for a $300 per month QMI expense as part of your Total Ownership Expense.
Ross Kay Realty Consultants is pleased to announce that for 2015 we have selected Holmes Inspections as our primary
Home Inspection service provider. Holmes Inspections meets our requirements on competency and through their pledged independence RKRC is able to judge their performance with our high net worth clients.