# Unsure what to do?



## ShannonC (Nov 16, 2012)

So I posted a while back about renting versus selling my condo in Edmonton. Since then I've had it on the market (since about March) and it hasn't even had one offer. I took the price down from the original $217,900 to $199,900 and still nothing. A pretty good amount of showings, but no lowering the price. 

So I've put up an add to rent it - 1 bedroom, 1 den with two underground stalls for $1450. I'm getting a decent amount of inquiries and am meeting a few potential renters this coming week. 

In the back of my mind though, I can't help but wonder if I should just be moving back into the condo and renting out the new townhouse instead. It wouldn't be ideal since I really was so excited to move here, but after being in for a while... I hate to admit it but there are things about condo living I do miss. 

And I'm pretty 100% positive I will keep the townhouse for a rental for a long time to come as it's in a very prime location (close to University and Whyte Ave for those who know the area). The townhouse is very new and modern and I put up an add tonight for $2400 a month and had an inquiry in an hour. It's 3 bedroom with a really nice master ensuite. 

And then another part of me wonders if I should just stick it out and keep trying to sell that condo. My brother has been living in it taking care of some of the rent, so that's been helpful. With winter coming he needs a place for his 'toy car' and I can't go in my underground condo stalls, so he'd have to move here (townhouse) and I'd have to move back (to the condo) while we keep trying to sell. 

Does stuff keep moving along fairly well in the winter? My realtor figures it's just a matter of waiting for the right person to come along. 

Do you think the townhouse rental would be a lot better of an option right now? Financially it seems tempting since the $2400 would cover both mortgages on the condo ($580 + 500 condo fees/taxes) as well as the mortgage on the townhouse ($1000) and still give me $300 above and beyond.


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## Chris L (Nov 16, 2011)

Without getting into the fine details, if you're interested in selling, sell it now, as things will MOST LIKELY not be better in the future for a sale. If no one is coming to look, take it down, drop the price and relist it. Continue to do this until you find a buyer. Better now than in 2-3 years. Or riding the market down. Things won't get much better in the rental market either. Just guesses though. If you want to tough it out for 5-10 years, that would be the alternative.


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## Just a Guy (Mar 27, 2012)

So, you could rent out 1 place and basically live rent free...meaning you could technically buy another place, rent both places and make 1450/month to go towards paying your new mortgage (which would allow you to live pretty much rent free, in a place you might like better all while building equity in three properties). 

Or

You could sell your current place, pay off your bank, realtor, lawyer, etc. pocket maybe a couple of bucks and continue to pay off your mortgage with after tax dollars. 

Tough choice you have there...

That being said, from an investment point of view, I think you paid way to much for your rentals to make them a good investment long term, but you may luck out if rents remain high.


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## MoneyGal (Apr 24, 2009)

Just a Guy said:


> So, you could rent out 1 place and basically live rent free...meaning you could technically buy another place, rent both places and make 1450/month to go towards paying your new mortgage (which would allow you to live pretty much rent free, in a place you might like better all while *building equity* in three properties).
> 
> Or
> 
> ...


It isn't building equity if the value is dropping.


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## Just a Guy (Mar 27, 2012)

In 20 years, when they are paid off, yes. Even if their value drops. Plus, it wasn't her money. 

In 20 years, lets say all three drop to 100k each, she has 300k in equity total cost $0 (renters paid for it). 

On the other hand, if she keeps it to live in, and the value drops it's her money lost.

In this case, 20 years later she has 100k in equity, which probably cost her around 600k (after tax dollars) to build. (Assuming she paid about 200k originally and interest rates don't rise)


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## marina628 (Dec 14, 2010)

I would leave your brother out of this unless he also has money in the deal.Forget about him and his car situation and do what is best for your financial bottom line.Is there any profit coming from the condo?This boils down to math , you have to see which will offer best CAP rate .Is the price the issue for the condo or is it that the monthly fees makes it unattractive to potential buyers?


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## MRT (Apr 8, 2013)

The idea of covering all costs, + $300/mth extra, would be extremely appealing, especially if it allows you to save/invest more of your disposable income.

personally, I would care more about the finances, and less about having 'more house' to live in (which is grossly overrated, IMHO, unless you have kids, pets, etc. and want a bigger space and yard).

Add in that you say that you miss some features of condo living and suddenly the t.h. move isn't really all it is cracked up to be, no? I would rent the townhouse, move back into the condo, and enjoy the financial benefit.


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## ShannonC (Nov 16, 2012)

Thanks for all the replies. It's really a frustrating situation; I really wish the condo would just sell already but I'm not having much luck with that. 

Basically the numbers are: 
Condo: 200k (paid price)
Mortgage: $580
Condo Fees: $350
Taxes: $125
Potential Rent: $1450

Townhouse: 375k (paid price)
Mortgage: $1050
It's brand new so I'm not entirely sure what property taxes will be on it yet... 
I got an inquiry last night for $2400/month to rent the townhouse. 

I'm not so concerned with my brother's needs per say, he's helping me out living in one place to help save me mortgage payments while I try and sell. So him or I can live in either place and I'll only have to pay one mortgage for the time being... but in two months, he would need to be the one in the townhouse. 

Longer term, if I was keeping any rental it would be the townhouse and in the future, this one will retain resale value far better I'd say so the condo really is the one that needs to get sold. I can only see it becoming a big liability down the road as condo fees seem to increase each year and if the rental market starts dropping, it wouldn't be good. 

So it's always quite a bit harder to sell after it's been a rental then? I don't especially want to hang onto the condo for 10+ years... but if I get a renter in there, I'm not sure what other options really are. Is it common for renters to move in being okay with the place still being up for sale?


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## marina628 (Dec 14, 2010)

Given what you posted I would move back to the condo and rent the townhouse for $2400 a month.You are at a loss now on the condo but having that $2400 rental income will offset your condo fees .I assume you have no profit built into the condo yet and probably a locked in mortgage.Selling while you have a tenant is a pain and you need to find an investor to purchase the unit .If you rent the townhouse obviously your brother will have to solve his own car storage issue, I assume he has a sportscar and cant get into the underground garage .My husband has one as well that he paid nearly $100,000 for the thing is so stupid as after 3 years and 2 months he has 11,000 km on it , cant drive it at night because of bugs ,can't drive it when it rains .Guys and their cars drive me nuts but I got equal amount for diamonds and I wear mine 24/7 lol


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## ShannonC (Nov 16, 2012)

marina628 said:


> Given what you posted I would move back to the condo and rent the townhouse for $2400 a month.You are at a loss now on the condo but having that $2400 rental income will offset your condo fees .I assume you have no profit built into the condo yet and probably a locked in mortgage.Selling while you have a tenant is a pain and you need to find an investor to purchase the unit .If you rent the townhouse obviously your brother will have to solve his own car storage issue, I assume he has a sportscar and cant get into the underground garage .My husband has one as well that he paid nearly $100,000 for the thing is so stupid as after 3 years and 2 months he has 11,000 km on it , cant drive it at night because of bugs ,can't drive it when it rains .Guys and their cars drive me nuts but I got equal amount for diamonds and I wear mine 24/7 lol



I had to laugh at the car comments, that is EXACTLY his situation..only it's an old mutsang he's rebuilding. It's his 'baby' but the thing has caused him far more trouble in his life than what it's worth. 

But yeah, I'm sort of leaning towards that route. I may rent the townhouse to him though. I trust him and I know he'll take good care of it...so I'd have no problem moving back in here once the condo does sell (God willing...). With a renter though...I'm not sure I'd move back in here and I can't just kick them out at will when the condo sells, so then I'd be out a place to live. With him, he'll just move back to my parents house (which he's buying next year from them). 

Long term the townhouse would make for an okay rental though? It seems so based on the location and how much I can get as a rental rate and the mortgage value.


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## jcgd (Oct 30, 2011)

Could you put the car at your townhouse while he stays at the condo?


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## ShannonC (Nov 16, 2012)

Yah, we could go that route as well. I'd be parking on the road, but it's definitely a possibility. The only thing is he's not as fond of condo living (he likes his stereo and TV louder...), so he'd go for it but probably wouldn't be as happy as just moving here.


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## Just a Guy (Mar 27, 2012)

For Edmonton, neither would make good long term rentals. I know the area well and there are plenty of cheaper places on the market. It could explain why you can't sell your property, even at a loss. Prices there are on the decline. 

In another thread, I mentioned that the average home price should be about 2.5x the average salary. 

Well, the average salary in Edmonton is 48k. The average house price is 349k, not 120-150k. Edmonton is weird though, with sky high rents. There is no cheap housing as apartments were converted to condos during the last boom, plenty of people moving in for the jobs, but these are transitionary people. 

All this seems to mean a strong demand for rentals, and an overprice market with little demand for sales. I wouldn't want to be a homeowner in that city who bought a house in the last ten years, I think they'll take a bath. A long term owner for rentals, especially those who bought cheap, will make a killing for years. 

In your case, I think the rental demand could bail you out of your situation, maybe prices will grow again as the current boom escalates, but even if it doesn't someone else could be paying for your loss. 

No true investor would buy your places even if they had a tenant, they are too expensive.


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## ShannonC (Nov 16, 2012)

Just a Guy said:


> For Edmonton, neither would make good long term rentals. I know the area well and there are plenty of cheaper places on the market. It could explain why you can't sell your property, even at a loss. Prices there are on the decline.
> 
> In another thread, I mentioned that the average home price should be about 2.5x the average salary.
> 
> ...


Thanks for this insight. So you're saying it would likely be best to try and rent out the condo due to the market conditions? That's the biggest question right now...whether to rent out the condo or keep trying to sell. As long as my brother is on board to live in one place, it's not a huge hardship to keep trying to sell, but I could sit here a while waiting. Come May he won't be on board for either as he'll have his new place to live in so then I either have to get a renter or foot both mortgages myself. 

I guess my big fear is to not try to sell the condo now, rent it but then trying to sell it down the road when it's just me is harder as I may sit with two mortgages and if it's then harder to sell since it was rented.. that could be a real problem.


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## marina628 (Dec 14, 2010)

ShannonC said:


> Thanks for this insight. So you're saying it would likely be best to try and rent out the condo due to the market conditions? That's the biggest question right now...whether to rent out the condo or keep trying to sell. As long as my brother is on board to live in one place, it's not a huge hardship to keep trying to sell, but I could sit here a while waiting. Come May he won't be on board for either as he'll have his new place to live in so then I either have to get a renter or foot both mortgages myself.
> 
> I guess my big fear is to not try to sell the condo now, rent it but then trying to sell it down the road when it's just me is harder as I may sit with two mortgages and if it's then harder to sell since it was rented.. that could be a real problem.


Forget about trying to sell with a tenant ,you have to make the decision now if you want to be a landlord.Will your brother pay you the $2400 a month to rent the townhouse in the fall?If so rent to him until next year and move yourself back to your condo.


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## ShannonC (Nov 16, 2012)

marina628 said:


> Forget about trying to sell with a tenant ,you have to make the decision now if you want to be a landlord.Will your brother pay you the $2400 a month to rent the townhouse in the fall?If so rent to him until next year and move yourself back to your condo.


Yeah, I think you're right...renting and trying to sell won't happen. 

He'll cover the mortgage and pay utilities. He won't pay $2400 but I'm fine with him just covering the costs of the place. He'll take better care of it than any renter would so that's a fine trade-off for me if I'm going to get someone in here for the time being.


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## marina628 (Dec 14, 2010)

I own many rentals so I don't see it as a trade off , I see it as a loss of a few thousand dollars by renting to family


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## Berubeland (Sep 6, 2009)

Most tenants in Ontario are not at all cooperative of selling and I can't really blame them. Showings are intrusive and occur at weird hours, agents come by with no or little notice and expect your place squeaky clean. In the meantime if the place gets sold, you have to move. 

Many people have been evicted due to sale of property.


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## My Own Advisor (Sep 24, 2012)

My experience: it is harder to sell after it's been a rental. Market timing with RE is everything.


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## the-royal-mail (Dec 11, 2009)

Forget about landlording to anyone. No point in keeping condo if you're only going to cover your costs. Keep lowering the price significantly (ie. at least $5000 at a time) until you sell the condo. Sooner or later it will sell. Trying to sell with a tenant in there, as described above, is an experience I don't wish on anybody. It's bad for both sides. Try to avoid it if at all possible.


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## ShannonC (Nov 16, 2012)

So I got some new information today that is potentially very bad news... 

I talked to my real estate agent a bit more and what's going on with the condo is that there is a potential structural issue and that's what's turning the buyers away. He had told me about this a few weeks ago but with all the people who have come to view it in the last little while, that's the biggest thing that's putting them off. He said we would have had two offers, had it not been for that. 

So he's calling the management company tomorrow to press harder on when the info will be released how much is going to be due. This is bad.. hopefully it's not going to be major, but who knows what they'll come back at. He said it sounded as though it's an issue with the beams that were put in. 

This will really throw things off because I can't see anyone buying while that's going on and not resolved? I really would rather not rent the condo because it will be very hard to sell if I do, which means I need to move back here. 

I've had a few more inquiries for 2400, so that's promising perhaps. My brother's also still on board to stay here until March so I'd have then to keep trying to sell before he wants to be out. The good thing with him living here is he can leave, so if the condo did sell, I'd have a place to go back to. With renters, that wouldn't be the case. But he'll only pay $1500 to cover the mortgage and a bit of utilities.


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## marina628 (Dec 14, 2010)

ShannonC said:


> So I got some new information today that is potentially very bad news...
> 
> I talked to my real estate agent a bit more and what's going on with the condo is that there is a potential structural issue and that's what's turning the buyers away. He had told me about this a few weeks ago but with all the people who have come to view it in the last little while, that's the biggest thing that's putting them off. He said we would have had two offers, had it not been for that.
> 
> ...


It is cheaper for you to pay storage for your brother's car than let him rent the townhouse for $1500 all inclusive.You stated you missed living in your condo so I think if you have to rent one property it should be the one that makes the most financial sense.


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## Sampson (Apr 3, 2009)

ShannonC said:


> So I got some new information today that is potentially very bad news...
> 
> I talked to my real estate agent a bit more and what's going on with the condo is that there is a potential structural issue and that's what's turning the buyers away. He had told me about this a few weeks ago but with all the people who have come to view it in the last little while, that's the biggest thing that's putting them off. He said we would have had two offers, had it not been for that.
> 
> So he's calling the management company tomorrow to press harder on when the info will be released how much is going to be due. This is bad.. hopefully it's not going to be major, but who knows what they'll come back at. He said it sounded as though it's an issue with the beams that were put in.


As an owner, you have a right to this info and you should be trying to keep up to date with your property. If the home you lived in had structural issues, I would dig deep into finding out what is going on.

Any decent condo board should give you full disclosure on the issue, and try to attend board meetings if you can, and definitely AGMs, better yet, sit on the Board so you have some control over this. As a Board, they can go through meeting minutes and present details only relevant as to not spook potential buyers away.

In the present situation, I think you need to ask the Board for the exact nature of the problem and figure out what their planned strategy will be. If it is a cash call, or increase monthly fees. Disclose this to potential buyers, and possibly even offer a rebate on the selling price based on present estimates. this could calm a buyer enough to move forward.


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