# Would you sell or hold ?



## Mechanic (Oct 29, 2013)

Wife and I purchased a 2nd property in BC back in 2008, with a view to retirement. Paid around $500k. In the interim, we decided to rent it out to help cover costs. Keeping it rented hasn't really been a problem but it has only made about $11000/yr after expenses and before tax, which isn't a great return, and there was also interest for a few years while we paid it off as quickly as we could (we hate debt). It has also dropped in value by about $80k. As many know, plans change and we find we do not want to retire to the area anymore. Renting has been a little stressful as renters don't look after the place and expect lots of damage to be "wear and tear" and property managers seem to just want to keep tenants happy and collect fees. All the small repairs that I would normally just do myself have to be hired out as we are too far away (hence property mgmt) We are considering putting it on the market and purchasing another property out on the West Coast, where we could use it ourselves as we spend a large portion of our winter out there in an RV. If we wanted to we could also rent it out in the summer until we decide to relocate. As we have never actually lived in the house we currently have in BC ourselves, I am thinking the loss on resale could be used against our future income taxes ?


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## Just a Guy (Mar 27, 2012)

Some things here doesn't make sense...

You've paid off the property completely, and still made a profit of $11000, now that you don't have interest on the property, your profits should have increased...

Next, you have a paid off property in BC, which you want to sell in order to buy another property on the "west coast"...as in BC? You don't use a property in BC because it's too far, yet you'd buy another property in BC and use it?

If you sell at a paper loss (since you made $11k for 7 years, it's at least not a real loss) you can claim a capital loss on he investment if you sell...

It seems that you are confusing "investment properties" with personal properties. It's hard to make money on a $500k single door...it should never be considered as an "investment", so don't be surprised it didn't generate better returns. It also sounds, like you're about to repeat your mistakes again.


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## Mechanic (Oct 29, 2013)

Sorry for the confusion. Wasn't originally intended as a rental and was personal property that we decided to rent in the interim. The property was paid for several years ago, while we were still working, with after tax money and generates about $11k a year after expenses are paid currently. We are ultimately looking for a home in a location we can retire to, not a rental unit and will likely relocate at some point. We are just trying to decide whether to keep it and let it generate the revenue, or sell it. $11k doesn't seem like a good return for what we have tied up in it.


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## Just a Guy (Mar 27, 2012)

As a rental, it's not a good investment but, as I said, a personal home rarely is.

I'd sell it.

If you want a place to live, it's rarely going to grow in value at a good rate. You may be better off buying a number of rentals, or investing the proceeds of the sale elsewhere until you are ready to retire, then sell the investments and buy the place you actually want. Being at the age you want the property, you are more likely to get what you want, plus your money will be better invested until that point.


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## Getafix (Dec 29, 2014)

Mechanic said:


> $11k doesn't seem like a good return for what we have tied up in it.


$11k on a 500k investment is only a 2.2% return. You can easily get over double that by investing in a REIT, with no hassle of tenants or maintenance (if you're willing to take on a little risk of course).


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## naktipanchal (Mar 16, 2015)

Buying and renting as investment is nice option


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## CharlesF.Donahue (Jan 7, 2015)

> You can easily get over double that by investing in a REIT, with no hassle of tenants or maintenance (if you're willing to take on a little risk of course).


Yes it will be better if you invest in a REIT and from here you will not have to worry about different issues of home or property or tenant.


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