Sell or Rent Out?

[003]

Hello Rein Members,

I own a 2 bedroom / 2 bath condo in Port Coquitlam, BC. (Vancouver) 3 years old. At it`s peak it would have sold for $285,000. Now I would get $255,000. $5,000 less than than I paid for it. My realtor told me if I don`t sell in the next 6 months I could be living in it for the next 2 years. I could rent it out at a loss of about $200 a month. Considering refinancing at a lower rate to get positive cash flow. Haven`t rented out a space yet. A little nervous.

Do you think prices are going to go down another 10% and how soon would they recover? The crystal ball question. To consider: 75 condos on the market in downtown Port Coquitlam. That is a lot. 70,000 people a year are moving to Vancouver each year. We are 35 minutes from downtown Vancouver. Fairly close. There is a skytrain that will take you there from here.

I would like to give a shot at renting it out.

What would you do?

 

[Thomas Beyer]

QUOTE (3 @ Apr 2 2009, 10:13 AM) Hello Rein Members,

I own a 2 bedroom / 2 bath condo in Port Coquitlam, BC. (Vancouver) 3 years old. At it`s peak it would have sold for $285,000. Now I would get $255,000. $5,000 less than than I paid for it. My realtor told me if I don`t sell in the next 6 months I could be living in it for the next 2 years. I could rent it out at a loss of about $200 a month. Considering refinancing at a lower rate to get positive cash flow. Haven`t rented out a space yet. A little nervous.

Do you think prices are going to go down another 10% and how soon would they recover? The crystal ball question. To consider: 75 condos on the market in downtown Port Coquitlam. That is a lot. 70,000 people a year are moving to Vancouver each year. We are 35 minutes from downtown Vancouver. Fairly close. There is a skytrain that will take you there from here.

I would like to give a shot at renting it out.

What would you do?
renting takes time .. and expertise .. and there is some risk of skipping rent and damage to the place .. but if you can get $1500 why not rent ?

Have you spoken to a property management firm that rents individual condos ? Ask them for a realistic rent and what % they charge to rent it for you (likely about 10-12%) ..then decide !

Where do you personally live ?

Why not move in yourself .. as market will be flattish for a while .. but at sub-300K in PoCo eventually it will go higher and you will pay no taxes if your own residence. Why not move in and sub-let one room for $600 (or $1000 or whatever the market is these days in PoCo, maybe to a SFU student ?)

 

[003]

We are currently living in it. We are moving to Kitsilano, BC (Vancouver) about 30 minutes away. Mostly just curious where the market is going? Maybe $1500 a month as a rental. Thank you for your advise.

 

[invst4profit]

You really need to do the numbers on renting and factor in the possible downsides.
Two years from now a loss of $5000 could look minor compared to the potential costs and problems associated with renting short term. With your short time line it really comes down more to a personal decision than a financial decision.
How do you feel about being a landlord?
Are you prepared to do work on the unit (damage by renters) in order to sell.
Is $5000 a lot of money to you?
Are you willing to gamble one way or the other?
Is negative cash flow balanced out by potential upside on sale?

Sort of a what if, maybe situation considering the economy is unknown and renters can be.....dare I say, a potential disaster.

 

[lyndsy]

QUOTE (thomasbeyer2000 @ Apr 2 2009, 09:36 AM) renting takes time .. and expertise .. and teher is soem risk of skipping rent and damage to teh place .. but if you can get $1500 why not rent ?

Have you spoken to a property management firm that rents individual condos ? Ask them for a realistic rent and what % they charge to rent it for you (likely about 10-12%) ..then decide !

Where do you personally live ?

Why not move in yourself .. as market will be flattish for a while .. but at sub-300K in PoCo eventually it will go higher and you will pay no taxes if your own residence. Why not move in and sub-let one room for $600 (or $1000 or whatever the market is these days in PoCo, maybe to a SFU student ?)
Hi 003, I currently live in Port Moody and have done some analysis on market rent in Poco, Maple Ridge and Pitt Meadows. I hate to say that $1500/mnth for a 2 bed condo in Poco is about $200 too high. Can you afford to stay in Poco and rent out a room to a Douglas College student (5 mins away) like previously mentioned? If not, I would sell. That home would be negatively cash flowing for many months to come.