# Islamic (non-Riba) financing, using the Musharaka concept.

Currently, rental rates in Montreal are such, that the yield to an investor is about 7% to 8% after payment of real estate taxes and insurance. This yield is inferior to that in Vancouver or Toronto, but superior to that in Quebec City or Edmonton. Assuming, prevailing rental rates, in Montreal, yield 7.5%, the following examples can be developed.

**Example 1 :** House value = $100,000, member's investment = $20,000 or 20% and coop's investment = $80,000.

Per Year | Per Month | |
---|---|---|

Estimated net rental value (7.5% x $100,000) | $7,500 | $625 |

Rent payable to coop (80% of above) | $6,000 | $500 |

Reimbursement of capital (3% x $80,000) | $2,400 | $200 |

Expected Payment by Member |
N/A | $700 |

Estimated insurance and taxes | $2,400 | $200* |

**Example 2 :** House value = $140,000, member’s investment $40,000 or 28.6% and coop’s investment = $100,000 or 71.4%.

Per Year | Per Month | |
---|---|---|

Estimated net rental value (7.5% x $140,000) | $10,500 | $875 |

Rent payable to coop (71.4% of above) | $7,497 | $625 |

Reimbursement of capital (3% x $100,000) | $3,000 | $250 |

Expected Payment by Member |
N/A | $875 |

Estimated insurance and taxes | $3,000 | $250* |

**Example 3 :** House value = $180,000, member’s investment = $60,000 or 33.3% and coop’s investment = $120,000 or 66.7%

Per Year | Per Month | |
---|---|---|

Estimated net rental value (7.5% x $180,000) | $13,500 | $1,125 |

Rent payable to coop (66.7% of above) | $9,000 | $750 |

Reimbursement of capital (3% x $120,000) | $3,600 | 300 |

Expected Payment by Member |
N/A | $1,050 |

Estimated insurance and taxes | $3,600 | $300* |

*Member occupants have a choice to pay total amount by themselves or Qurtuba can pay total amount on their behalf and they can make monthly payments to Qurtuba. An estimated calculation of monthly payments is shown below.