# Sell or keep decision of properties in Toronto area



## can_84 (Jul 2, 2011)

I would appreciate some input about selling or keeping the three properties I currently own.

1. Property 1 is a detached house (we live in and have rented out the 1st floor unit) 
2. Property 2 is a town house (new build)
3. Property 3 is a detached house (new build)


I am considering selling one of the above to reduce my risk with the Toronto real estate but given the current dip I am not sure if I should sell this year. 

My wife wants to sell one and make ourselves mortgage free (dead $ but she wants the mental peace), it would also allow me to pursue other ventures outside of real estate. 

What would you do in this situation?


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## AltaRed (Jun 8, 2009)

Listen to your wife and sell one of the above. Keep your principal residence debt free. Peace of mind and a happy wife is definitely not dead money. 

You could be heading into a -20% market with such speculation.


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## Just a Guy (Mar 27, 2012)

I would need to know a lot more details like he value of the properties, their rent, expenses, etc.

All that being said, considering the location, I'd suspect the rentals won't cash flow so I'd probably sell them and but properties that do.


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## BryanBouchard (May 15, 2018)

I only vote for selling one property if you are not planning to expand your real estate portfolio in the future. I don't agree with trying to time the market by anticipating a correction; real estate is a long-term game and temporary price corrections don't hurt solid cashflowing properties anyway.

However, if this is part of your exit strategy, then I would sell my poorest performing property (i.e. lowest cashflow). I like the idea that you are house hacking, so I would keep that one and continue living there. I do this as well and I basically live for free. I just recently wrote an article about this on my financial blog.

Also, keep in mind the partial tax deduction you currently have on the mortgage interest on your personal residence. By paying off the mortgage, you lose that deduction, creating higher taxable income. 

I have properties in the GTA as well and amid a price correction, I will simply be looking to add to the portfolio. Therefore, I am not concerned with what happens in the short term.

Food for thought, anyway!

Bryan


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## fireseeker (Jul 24, 2017)

I suggest simplifying your question. 
You said you were thinking about selling because a) your wife wants you to, and b) because the market may correct.
I say forget about b) -- the future of the RE market (and all others) is unknowable. It may pop back up, or it may finally slump seriously. There is no way to predict which one will happen.
OTOH, you have a clear goal articulated by your wife. So go with it. It will make her happy, lower your exposure to the asset class and free you up for other ventures. 
That's a win-win-win, whatever the RE market does.


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## Mortgage u/w (Feb 6, 2014)

I am assuming prop 2 and 3 are rentals. I will also assume they are not cash-flow positive. Given my assumptions, I would sell them both.

On the other hand, if both rentals are profitable, then there is no reason to sell. Timing the market is never a good investment strategy.


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## Westerncanada (Nov 11, 2013)

AltaRed said:


> Listen to your wife and sell one of the above. Keep your principal residence debt free. Peace of mind and a happy wife is definitely not dead money.
> 
> You could be heading into a -20% market with such speculation.


Listening to the wife is always a good idea 😉 me personally I would go mortgage free and live without debt or obligation to anyone. That's the dream!


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## can_84 (Jul 2, 2011)

Thank you everyone I really appreciate your thoughts. At this point I am leaning towards selling property 1 which has allot of equity locked and moving in to property 3 while paying it off. I also started investing with a partner so like mentioned by everyone a paid off house will give me flexibility. 

now if i can figure out which fool to vote for in tomorrows Ontario elections that would be awesome! Its like making a choice between a witch, a god father, and everything free funded by debt lady. Politics


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## lonewolf :) (Sep 13, 2016)

If your not making @ least +3.5% annual (which is equivalent to 5 year GIC @ Meridian) on value of property I would sell for sure just set it & forget it for next 5 years. The time & energy you spend looking after property you want to be @ least making as much as you would if you were to spend the same amount of time & energy working @ a job on top of the 3.5%.


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## JWC (Nov 6, 2014)

AltaRed said:


> Keep your principal residence debt free. Peace of mind and a happy wife is definitely not dead money.


That's a understatement! Haha


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## new dog (Jun 21, 2016)

I also agree, it makes it an easy decision.


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