# now is a good time to sell, couple sells their house and chooses to rent instead



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

http://www.theglobeandmail.com/glob...-bold-sell-the-house-and-rent/article2418383/

"In fact, their *monthly rental costs are only a little less than their mortgage payments*, which were set at a high level to speed up the repayment process. But they estimate *they’ll save thousands by not paying property taxes and home maintenance costs*."

So if you have a valuable house, with current property prices being high this sounds like a great time to sell.


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## Homerhomer (Oct 18, 2010)

the-royal-mail said:


> http://www.theglobeandmail.com/glob...-bold-sell-the-house-and-rent/article2418383/
> 
> "In fact, their *monthly rental costs are only a little less than their mortgage payments*, which were set at a high level to speed up the repayment process. But they estimate *they’ll save thousands by not paying property taxes and home maintenance costs*."
> 
> So if you have a valuable house, with current property prices being high this sounds like a great time to sell.


One of many globe and mail tid bids not worth the paper it is printed on.

A family sells a house becuase it's expensive, so what?


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## blin10 (Jun 27, 2011)

problem with that you need to invest all the money you made from a sale into some type of investment that will generate income to pay some part/all of rent, otherwise it doesn't make sense


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## Eder (Feb 16, 2011)

I sold my house recently. It represented too much of my net worth. I will use the proceeds to buy my sailboat.


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## Dibs (May 26, 2011)

Now is a good time to sell, says the papers. Could this be the start of the end of the current real estate bubble?


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## ddkay (Nov 20, 2010)

Sounds dumb, instead of trying to top tick the market this couple could rent out their basement. It would probably pay most of their mortgage. They'll still own the house instead of throwing $30K/year out the window on rent, and they'll only have to pay property taxes and maintenance which is at least 1/3 the cost of rent. Not to mention the landlord economy goes absolutely nuts after a housing crash, at least in the US:










But nobody knows what their monthly payments are, this piece is written all ambiguously like usual...

Doesn't mention RE transaction fees, moving costs.. there's a lot of overhead in moving. People should stay put unless their area is turning into crack dealer headquarters.


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## Koala (Jan 27, 2012)

They could rent out their basement if it's legal. I know of many areas where it was very difficult to legally set up a secondary suite.


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## ddkay (Nov 20, 2010)

That's a good point, it should meet local code, and could still be a reasonable alternative compared to selling outright. I just don't see why people would voluntarily burn up what remains of their home equity on rent waiting eternally for "the correction". How much profit are they locking in exactly? The story doesn't mention the couple's costs, age profile or anything. So it's hard to make a relevant comment.


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## Spudd (Oct 11, 2011)

We are considering doing this. We paid 420k for our house in 2006 and we think it would sell now for maybe 750k. We owe 220k on the mortgage so we would have 500k in the bank if we sold it. Between the interest we currently pay on the mortgage (500/mo) and property tax (300/mo) and interest we would get on the 500k (833/mo) we can basically rent for free. If the market then crashes we can buy back in for a significant savings. However, it's a big idea and we haven't fully decided yet. We're in the midst of sprucing up the place and once that's done we'll decide.


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## hystat (Jun 18, 2010)

the-royal-mail said:


> *they’ll save thousands by not paying property taxes and home maintenance costs*."


If they save $8,000 per year, the first 8 years of "savings" will pay the closing costs on selling their home.


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## hystat (Jun 18, 2010)

Spudd said:


> it would sell now for maybe 750k. We owe 220k on the mortgage so we would have 500k in the bank if we sold it.


forgot to pay the Real Estate agent, the lawyers, the movers, etc etc
You can't get out of a 750K house for 30K

RE fees alone will be 40K

and if you sell privately.. the buyers want 40K off the top ... the culture is always that as soon as someone sees "for sale by owner" they want it cheaper


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

This was discussed on last night's National. I think everyone agreed that prices are ridiculous and suggested renting is a valid option depending on where the person is at in their life.


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## Four Pillars (Apr 5, 2009)

The "savings" will come from successful market timing in avoiding equity loss. Not from any sort of rent vs buy advantage.

If you sell your $800k house today, net $750k and then buy it back again in 18 months for $400k, clearly the rent paid is not thrown away and is in fact a brilliant investment.

Can this be done? I'm doubtful. You need a significant correction, it should happen in a reasonable amount of time, you need patience because real estate cycles can be incredibly long, you have to know when to sell, when to buy, etc etc.

I'm staying put.


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## HaroldCrump (Jun 10, 2009)

Four Pillars said:


> If you sell your $800k house today, net $750k and then buy it back again in 18 months for $400k, clearly the rent paid is not thrown away and is in fact a brilliant investment.


So you are talking about a 50% RE correction scenario.
While the numbers appear to make sense, in reality the person in question will not buy.
Even assuming his/her job is secure (at that time), the devastation caused in the overall economy and markets as a result of 50% crash in RE prices (which is more or less what happened in the US), will be so severe that buying a house will be the last thing on most people's minds.


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

Sell now and lock in your profits!


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## piano mom (Jan 18, 2012)

Don't forget: Any gain made from your investment is also taxable, that could potentially cause OAS clawback for seniors or raise workers' tax brackets.


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## Four Pillars (Apr 5, 2009)

HaroldCrump said:


> So you are talking about a 50% RE correction scenario.
> While the numbers appear to make sense, in reality the person in question will not buy.
> Even assuming his/her job is secure (at that time), the devastation caused in the overall economy and markets as a result of 50% crash in RE prices (which is more or less what happened in the US), will be so severe that buying a house will be the last thing on most people's minds.


Good point Harold. How many of us went hard in the markets in March of 2009?


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## Sampson (Apr 3, 2009)

Is anyone aware of the success rates of timing real estate transactions vs. timing stock market transactions?

Somehow we all feel we know real estate much better than other asset classes, but how many of us compare housing to rental costs using real metrics? And how can a rule (that all real estate in Canada is over valued) hold true.

I can only ever use Alberta as an example because that is the only market I'm familiar with, but cap-EX is way up again, migration is nearly back to the levels of 2006, so jobs AND more people - so please make a case for how we all KNOW real estate is overvalued? Is real estate over- or under valued in Kitimat BC?


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## Eder (Feb 16, 2011)

I would say Kitimat is under valued. Average 2012 bungalow selling price is under $150k. Average wage for a male is 65k....


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## donaldmc (Feb 27, 2012)

I definitely agree, i have been renting and it's really quite hassle. Thanks also in sharing this with us.


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## Square Root (Jan 30, 2010)

it may seem like a good idea to sell now and rent but it is very difficult to time any market. i agree with most of the previous posts. Unfortunately most people are captive to the real estate market. It would be very dusruptive and potentially expensive to be otherwise.


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