having problems making decisions to sell of rent my condo/townhome?
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Thread: having problems making decisions to sell of rent my condo/townhome?

  1. #1
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    Talking having problems making decisions to sell of rent my condo/townhome?

    Hey all:

    I need some advice and if I should be keeping or selling my townhome/condo. This townhome condo is in a prime area in Calgary, Kensington. For those of you who don't know, right next to downtown, the river, pathways, shopping, pubs and resturants. My property is unique as it's classed as a condo however its a SW facing corner unit, with a yard and fenced that you can walk-up to from the street without using the elevator of the building. It is 3 years old and fully upgraded.

    I bought for 449k and its now worth about 559k according to my realtor. I owe approx 400k on the mortgage including the HELOC i put a 10% downpayment on a new condo downtown that is finished in July. So I have made about a 150k in equity.

    I am unsure if I should just sell and move into my new place, putting 20% down on the new one, or keep it, rent it out for 1900-2000 per month and only put 10% down on my new property.

    The rental market has also taken a hit in Calgary for now, so I should be able to get the 1900-2000 per month and just cover my expenses if you compare it to other listings in my area. But there is always risk of less.

    I have never been a landlord before and I am going back and forth in between selling and taking my 150k profit or renting it out in the long term and keeping the property because it will be hard to find that type of property in Kensington again for the price I payed. The condo fees are also about $490 per month and there is risk soon of a $100 month increase which means I may be supplementing the investment about $100 per month or so.

    Your help and insite about what I should do would be appreciated as I only have a few days to make a choice.

    Thank you


  2. #2
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    If you're not sure about renting, I'd sell. Being a landlord requires a commitment and it's not for everyone. When it's all dialed in, it can be easy but it will take time to find a good tenant and get things running smoothly. You need to work hard and be patient during the time you are starting your rental business.

  3. #3
    Senior Member tygrus's Avatar
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    Have you ever sold something before? Dont get hung up on appraisals, its never as much as you are thinking. If a realtor says its $150 profit, cut that number in half.

    You just witnessed a near death experience in the calgary economy and you want to carry two properties with debt and be a first time landlord and breaking even or adding money into the property. What are you thinking?

    If you can sell, sell and sit to the sidelines for a bit. That calgary housing market is being held up with wishful thinking. Homes could see $100k shaved off in the next few years.
    Last edited by tygrus; 2017-03-07 at 10:49 AM.

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  5. #4
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    It doesn't make sense as a rental unit.

  6. #5
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    Prices on home can go up or down in the future.

    The question is: is it worth it to pay the fees associated with selling now, or pay insurance on your new condo mortgage because downpayment is less than 20%?

    You will need to pay fees someday to sell your first home, either now, in 20 years or 50 years...
    but you can save on the insurance by having 20% downpayment.

    You might want to diversify your assets and don't have most of your assets in real estate in Calgary region.

    Renting to one person a one unit place is more risky than renting to 5-10-20 people.

    Personally, I would sell, have 20% downpayment and keep some money to either invest RRSP/TFSA, pay debts or other uses.

  7. #6
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    Quote Originally Posted by cashinstinct View Post
    Prices on home can go up or down in the future.

    The question is: is it worth it to pay the fees associated with selling now, or pay insurance on your new condo mortgage because downpayment is less than 20%?

    You will need to pay fees someday to sell your first home, either now, in 20 years or 50 years...
    but you can save on the insurance by having 20% downpayment.

    You might want to diversify your assets and don't have most of your assets in real estate in Calgary region.

    Renting to one person a one unit place is more risky than renting to 5-10-20 people.

    Personally, I would sell, have 20% downpayment and keep some money to either invest RRSP/TFSA, pay debts or other uses.
    Sell, mainly due to having to supplement the rental. The only rentals I ever had, it supplemented me, oterhwise it would be too risky.
    We can not know things as they are in themselves, but only as they appear to us.

  8. #7
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    I agree. It is a renters market in Calgary right now. The condo has too much value to make it fly as a rental, too much risk of being stuck carrying it and/or not getting the level of rent you anticipate. If you can make a decent buck selling it (unlike many conds in Calgary right now) - take the money.

  9. #8
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    Personally I'm not a big fan of negative cash flow rentals. I think for most people it opens you up to far too much risk.

    I know there are a few people on here, who don't put a lot of worry into cash flow when they invest in rentals, but they are typically people who can absorb the risk.

  10. #9
    Senior Member My Own Advisor's Avatar
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    Agreed with Potato. As a former landlord, you don't want -ve cash flow rental unit, at least not for long.

    Personally, I would also sell and put the money into RRSP, TFSA, etc. and then rent yourself. Housing market is nuts right now.

    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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