To Sell Condo or not to Sell...

[mike81]

Hey guys, just wanted to get some opinions on my situation.



Currently have a Condo in downtown Toronto (cityplace) 22 years left on mortgage

I will be buying a house next year sometime with my Wife. I`d like to keep the condo as an investment property and cater to `professional ` furnished rentals.



If I rent it out at normal rate, I would be breaking even each month. So basically I`d be just paying down the Mortgage.

If I rent out as furnished and short term to professionals, there`s potential to get some cash flow each month.

Now, I guess my options are should I sell now and take the 20-30k and pop it into new place, or hold out and in 20 years I should be cash flowing

plus have a condo with mortgage paid off ` in heart of Toronto.



Some surrounding pluses -new queens quay boardwalk, port lands, new TTC lrts etc

Cons ` Cityplace turns into Ghetto, markets crash and we all go running for the hills





sidenote - if anyone can recommend some Brokers and Realtors dealing in the East York/Victoria Village area, that be great

thx

 

[invst4profit]

Personally I believe condos in Toronto make for very poor rental property investments. As you say- break even. This is not my idea of a business.

Professional furnished on the other hand, unless managed by a specialty company, are very high maintenance in that most are short term tenants requiring "special care". PITA as far as I am concerned and long term may be vacant more than occupied depending on the management. In addition to be attractive to this type of property must be very well located.



I would say sell but the future of T.O. condo sales may not be too bright based on the large number on the market and coming to market. Owners over the past few years have discovered as rentals they make poor investments. Most lose money due to condo fees, low rents compared to investment cost and the Ontario RTA restricting owners control over their properties. Many and are fleeing the business.



Sell and move on with your life unless you love being a landlord in Ontario.

 

[Rickson9]

I would sell it.

 

[Passion4RE]

I would agree with this but make one side note. If you do keep it (not sure why) then it would be wise of you to make a run for the condo board. this way you can put pressure on keeping condo fees down and have at least a shot of making some cashflow.

 

[Thomas Beyer]

Keep it IF (and only if) it is at least break even after all costs, assuming no or little time investment by you. Consider going on the condo board for a year or 3 to learn and appreciate asset management. Sell if too much time is invested or cash flow is negative. Mortgage paydown can make you rich !

 

[mike81]

thanks for the responses guys.



the majority of ppl ived asked say to sell it and wipe my hands clean.... but then i tend to the opposite of what the majority ppl would do



going to investigate further some speciality management places like Greg mentioned and see what kind vacancies/rates i would be dealing with.

 

[invst4profit]

Novices often go contrary to the advice of professionals not because they know better, although they usually believe they do, but because they are incapable of separating personal emotional ties from best business decisions.



I believe you will regret becoming a landlord not necessarily because you will lose money but rather due to the anti landlord mentality that prevails in Ontario. Doing this as a professional business is one thing but is much different than a home owner simply deciding to keep a home as a rental. It's usually a bad decision.



If you are interested in finding out what being a landlord is really like in Ontario check out this forum. http://ontariolandlords.org/forum/

 

[Rickson9]

Some people just need to touch a hot stove to learn that it burns I guess.

 

[housingrental]

This:



[quote user=Rickson9]Some people just need to touch a hot stove to learn that it burns I guess.




Sell it

 

[mike81]

oops, i guess that last post sounded like i made up my mind, but i'm far from it. I tend to jump at high risk situations, because usually thats were the greatest rewards lie. But of course ignoring years of experience is sometimes plain stupid Why make your own mistakes, when you could learn from others especially in these days where knowledge is a fingertip away. Of course, theres still something to be said about how your mistakes shape your future for good or bad.

Hmm, I think thats a conversation for another time.



Anyways, I've taken the pro tenant laws here in Ont under consideration. Will have to tread lightly with tenants - when becoming a landlord. Also, the more i look into Cityplace Condos, it looks like the Cons outweigh the Pros. (major one is the glass condo affect down the road) Will have to start exploring new investment options and see what i have there.



Thanks for your thoughts guys.

 

[housingrental]

Mike81 - Sitting on cash is a great investment alternative in August 2012

 

[Rickson9]

I personally never felt that the greatest rewards lie where there is greatest risk, but that's me. Perhaps you've had great rewards taking great risk, but I've only found that to be an overused clichee myself.

 

[markl]

Hi Mike,



I would sell. Right now any gain is tax free where as all your mortgage pay down and appreciation in the future will be taxable. I would take my money where it would work harder for me than a downtown condo.



Regards,

 

[Thomas Beyer]

[quote user=markl]I would take my money where it would work harder for me than a downtown condo.
namely ?

 

[housingrental]

Bank account

Effectively no risk - Other than quasi government body defaulting on him, there is no risk

Much higher expected return than likely cash flow negative, likely falling value, condo





[quote user=ThomasBeyer][quote user=markl]I would take my money where it would work harder for me than a downtown condo.
namely ?

 

[Thomas Beyer]

[quote user=housingrental]Bank account

Effectively no risk - Other than quasi government body defaulting on him, there is no risk

Much higher expected return than likely cash flow negative, likely falling value, condo
return free risk ?



i.e. risk of inflation eating your 1% return ?



I had hoped for s.th. more profound, insightful.



Not all condos in GTA will fall in value.

 

[housingrental]

Sorry Thomas!



What I had intended to write was Mike please check out www.prestprop.com for potentially higher returns, with potentially less risk, and much less work.



Sometimes, it's better to let your money work for you, by making use of experts focused on adding value to your portfolio - creating mutually beneficially win-win arrangements. Are you really doing all you can for your family if you pass up this opportunity?



Now Mike, I know you are a smart person and want to do good for your family. Investing through them will allow you the potential for higher returns - Opportunity is knocking, will you answer?











[quote user=ThomasBeyer][quote user=housingrental]Bank account

Effectively no risk - Other than quasi government body defaulting on him, there is no risk

Much higher expected return than likely cash flow negative, likely falling value, condo
return free risk ?



i.e. risk of inflation eating your 1% return ?



I had hoped for s.th. more profound, insightful.



Not all condos in GTA will fall in value.

 

[housingrental]

Re above - I hope you enjoyed reading it and Thomas reads it in good cheer!



Mike - In all seriousness choose your risk. All options have potential downside. Make sure you are aware of and comfortable with it before taking option. Having cash available when opportunities present itself can be great - or when your new place with wife needs unexpected repairs. Alternatively investing in a fund like Thomas's provides, others, or even public REIT's might make sense. Keeping the condo will be work for you, with likely no operating income, and likely no appreciation. There could be appreciation. But there could also be appreciation with something more passive - or value added renovations on your new personal residence, which you would also get to enjoy + potential tax benefit.

 

[markl]

Hi Thomas,



I like properties with a little more cash flow. A nice little 2 - 4 unit that I can have managed and still enjoy cash flow.



As for location I am currently investing my money in Hamilton, ON.



Oh and Mike I can help you out with a realtor in those areas I didn't see that part of the post email me [email protected]

 

[mike81]

[quote user=Rickson9]I personally never felt that the greatest rewards lie where there is greatest risk, but that's me. Perhaps you've had great rewards taking great risk, but I've only found that to be an overused clichee myself.


True that it's a cliche. But here's another cliche - it's a cliche for a reason! Wow, that was a mouthful.

Some people are just comfortable taking moderate risk which is probably the 'safe' bet. And of course 'Risk' is so subjective. Saying that, in REI it's probably smart to play it safe. I was taking more of a general life approach and trying to apply it.



[quote user=housingrental]Sorry Thomas!



What I had intended to write was Mike please check out www.prestprop.com for potentially higher returns, with potentially less risk, and much less work.



Sometimes, it's better to let your money work for you, by making use of experts focused on adding value to your portfolio - creating mutually beneficially win-win arrangements. Are you really doing all you can for your family if you pass up this opportunity?



Now Mike, I know you are a smart person and want to do good for your family. Investing through them will allow you the potential for higher returns - Opportunity is knocking, will you answer?

and then i read your next post lol.



[quote user=ThomasBeyer][quote user=housingrental]Bank account

Effectively no risk - Other than quasi government body defaulting on him, there is no risk

Much higher expected return than likely cash flow negative, likely falling value, condo
return free risk ?



i.e. risk of inflation eating your 1% return ?



I had hoped for s.th. more profound, insightful.



Not all condos in GTA will fall in value.




[quote user=markl]

Hi Thomas,



I like properties with a little more cash flow. A nice little 2 - 4 unit that I can have managed and still enjoy cash flow.



As for location I am currently investing my money in Hamilton, ON.



Oh and Mike I can help you out with a realtor in those areas I didn't see that part of the post email me [email protected]




Thx guys