Advice on my condo: Sell or Rent?

[dvelecka]

For the most part, Canadians are in favour of home-buying, as two-thirds of Canadians own their own homes. This strategy is often viewed as a safe one and wise retirement savings vehicle, but this is not always the truth. The biggest factor to consider is the mortgage rate a homebuyer gets in order to finance their home. With amortization rates at 25-year for payback, home owners now have to pay back their mortgage at a much quicker rate, reducing the amount that they are able to borrow overall. Also, consider timeframe. Online mortgage calculators are a helpful tool to make long term projections when deciding whether or not to rent or buy. Especially over the short term, a look at the numbers show that renting is often a better option for many people.

[andrewf]

Unnecessary scrolling is definitely worse than divorce.

[thompsg4416]

Quick question related to this thread. I recently moved over seas and I am renting out my condo. Before leaving when it was still my primary residence I put down 30k on my mortgage. My question is when I move back and possibly sell it in the next 1-2 years will I pay capital gains on the whole amount or just the part of capital gains incurred since it became a rental property.

I.E When I left and it stopped being my principal residence I owed approx 120k. When I return and I'll owe approx 100k.

I will sell the residence for approx 230k.

What portion do I pay capital gains on?

Thanks!

[kcowan]

What portion do I pay capital gains on?

Thanks!

Several points:
The time the place was empty before being rented counts as your PR (up to a year)
The rental revenue was taxable and you could claim depreciation against that income = D
Capital in= $30k and $20k (mortgage reduction)
Property appreciation while PR and empty = X (- D already claimed)
Selling price = $230k
Maintenance costs such as repainting = Y
Selling costs = Z
Capital gain = 230-Z-Y-X+D-50
Taxable CG = .5 x CG

[thompsg4416]

So if i follow that properly I only pay capital gains on the gains after the tenents moved in

Only one question.. Capital gain = 230-Z-Y-X+D-50

the -50.. you came up with that by adding up my capital in?

Thanks Kcowan!

G.

[kcowan]

Only one question.. Capital gain = 230-Z-Y-X+D-50

the -50.. you came up with that by adding up my capital in?

Correct (20+30)

[peterk]

I got a better idea Michelle; ditch that boyfriend and come hang out with me. He can take my girlfriend, she's a spending fiend.
Where you living, girl?

Seriously though I'd sell the condo. Having your brother occupy for a few months sounds like a great idea however, in case you leave your boyfriend or he kicks you out. On top of that if it's 3 hours away it just makes the decision all the easier. I may have missed it but have you posted the expected rent amount? Unless you're making nearly 10% or more on it it's probably not worthwhile as an investment property in ANY situation...