# To own, or not to own: Trying to make a major life decision



## faline (Feb 10, 2011)

Hi everyone,

I bought a terrace home condo in Ottawa, in April 2008. It was pre-construction so I moved in August 2009. Purchase price: $240 000. 

I lived there until August 2011, when an unexpected CHEAPER opportunity came up, at which point I moved out and found 3 tenants to (almost) cover my mortgage.

I don't want to be a landlord, nor do I have the skills or personality for it. I'm at the point where I'd like to just sell it and live freely. The identical unit RIGHT next door (we share a wall!) is currently for sale for $315k.

To sell, or not to sell? To wait, or sell now? with the newly release budget, and threat of widespread job loss in the federal government, maybe now is a bad time? 

It seems to be a common thought that financially smart people own their homes. After paying a mortgage for x amount of years, you can retire with no mortgage! (or rent) 

But does that outweigh the property taxes, interest over the 25+ years, generally higher monthly price to own rather than rent? 

I'm wondering if I should just rent for the rest of my life. The freedom and lower monthly payments are really appealing to me. And I could invest MORE in my mutual funds (hello banks!) and RSPs. 

I'm a single female in my 20s, if that makes a difference. I can afford to own a home, but I prefer to live below my means. 

Advice appreciated.


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## Four Pillars (Apr 5, 2009)

faline said:


> I don't want to be a landlord


You've answered your own question. Sell.


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## faline (Feb 10, 2011)

I should clarify, the other thought is that I would move back in within the next few years...


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

You'll have to evaluate your own situation to see if it works for you. It's basically a math exercise. Add up all the costs of house ownership and compare those costs to your rent payment. Also compare if there any obvious upsides or downsides to your standard of living, commute etc in each situation.

In my own case I have come to the conclusion that owning a house is not a good idea. It really limits my mobility. Even if it's a condo/apartment type setup you have to factor in your LOSS when the RE agent grabs 4-5% of your sale price. So factor in those costs when you do your calculations.

The turnoff right now seems to be the hyper-inflated pricing on houses, all propogated by various gov't policies. If we're having to pay $500K and up for houses, how the heck are we supposed to save anything for retirement?

I like your idea of living below your means. I say keep it up.


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## Spudd (Oct 11, 2011)

If the tenants are only almost covering your mortgage, you're losing money on the house at the moment. And you don't like being a landlord. And they say we're in a housing bubble. I would sell.


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## Causalien (Apr 4, 2009)

I had dinner with someone I am trying to court as co-investors in future endeavors and I bounced a few ideas through them. This part, I believe, is very relevant to you.
*
"At your current situation, where you are healthy and able to recover from any loss faster than people at any other age group, your capital should be pooled into ventures where the profit will be multiplied if you put effort and time into it. Real estate, hotel business etc. have a limit on return due to the number of rooms you are able to rent out, so the return is fixed, no matter how hard you try. It is for us old people, who can't dedicate as much effort into the business."*


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## GreenAvenue (Dec 28, 2011)

Spudd said:


> If the tenants are only almost covering your mortgage, you're losing money on the house at the moment. And you don't like being a landlord. And they say we're in a housing bubble. I would sell.


Exactly what I would say. Even if you consider to move back I would sell. It's costing you money and if you don't like being a landlord (I am one myself and I regret it as well when I'm woken up in the middle of the night for some idiot reason from a tenant) than just step away and sell. Take a profit and move on.


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## doctrine (Sep 30, 2011)

Why tie up all your capital in an asset that cannot, by your own words, cover its own expenses? If you cannot make yourself at least cash flow positive, you are tying up all of your capital in a sinkhole. I would suggest that most savvy real estate investors would not consider holding a property if the rent didn't cover all expenses, including property taxes and a repair budget, and then have some leftover for contigency, let alone one that didn't even cover the mortgage.


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## financialnoob (Feb 26, 2011)

I believe it was Stormin' Norman Schwarzkopf Jr. who said, "The truth of the matter is that you always know the right thing to do. The hard part is doing it."

I think you already know the answer to your question. You've already said it in your posts.


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## faline (Feb 10, 2011)

Thanks for the thoughts/advice everyone. The fact that I got the answers I was looking for further indicates the right decision. Meeting with an agent this week.


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## Just a Guy (Mar 27, 2012)

Negotiate with the Realtor...no need to pay the 7/3.5% standard rates...


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