I've had a 2-bedroom apartment now in Killarney, Calgary for the last 10 years that has been a thorn in my side. I really can't imagine a worse investment and although I likely can't sell at this point, I thought I'd ask the question to get a professional take on it.
2-bedroom apartment - top floor (3rd) - walk-up - underground parking - 830 sq ft -
Bought in 2007 for $260K
Was hit hard in 2008 and then slowly climbed back up to maybe $245 last year.
Now got hit even HARDER in 2016, both in potential value and rents.
Plus, we just got hit with a $800,000 assessment between 24 units.
Over the last five years, it actually wasn't too bad. My total costs for the place were about $1350 and I was renting it out for $1575. Not a bad cash flow on an apartment.
But now, thanks to the assessment, we have a new "condo fee" of $266 monthly for 15 years. And Rents have dropped $400.
So currently:
Condo fees, $370 + taxes $100 + Mortgage $890 + new condo fee $266 is $1,626
Current rent is just $1150 (new tenants moving in this month)
Total LOSS of $475 per month.
I owe around $205K still. That's what is remaining on mortgage. With the $800K assessment, they not only fixed the big problem (moisture) but also renovated the exterior of the building plus new windows, new balconies, the whole nine yards externally.
However, there's a big problem with selling thanks to the 15-year assessment. That makes the condo fees almost $700 until then. Although a somewhat similar apartment across the street is going for $275K (asking, not selling), someone in our building on the second floor was listing his at a whopping $150K! and it didn't sell. Unbelievable considering LAST YEAR one sold for $250K. This guy was desperate because it was vacant and he bought a new house somewhere from what I hear. None the less, it didn't sell.
My current mortgage is just a 2-year, which ends in July. So I'll likely take another 2-year or a 5-year variable to keep costs where they are and pray there's no interest rate climb for 5 years (or at least not much).
I'm considering Rent-to-Own or maybe an assumable if that still works these days.
My new tenants are open to a 6-12 month, so I'm thinking 6-months, which would bring to May 2017 incase anything changes with the mortgage.
What would you do in this case?
If the chance ever comes to sell for $225K, I'm in.
But since one already didn't sell, I'm assuming that's not even on the table without losing my shirt.
But what would be your game plan?
Continue to take the $475 loss until rents climb back up? Hold for another five years until sale prices increase? Try to sell creatively via Rent-to-Own or something?
2-bedroom apartment - top floor (3rd) - walk-up - underground parking - 830 sq ft -
Bought in 2007 for $260K
Was hit hard in 2008 and then slowly climbed back up to maybe $245 last year.
Now got hit even HARDER in 2016, both in potential value and rents.
Plus, we just got hit with a $800,000 assessment between 24 units.
Over the last five years, it actually wasn't too bad. My total costs for the place were about $1350 and I was renting it out for $1575. Not a bad cash flow on an apartment.
But now, thanks to the assessment, we have a new "condo fee" of $266 monthly for 15 years. And Rents have dropped $400.
So currently:
Condo fees, $370 + taxes $100 + Mortgage $890 + new condo fee $266 is $1,626
Current rent is just $1150 (new tenants moving in this month)
Total LOSS of $475 per month.
I owe around $205K still. That's what is remaining on mortgage. With the $800K assessment, they not only fixed the big problem (moisture) but also renovated the exterior of the building plus new windows, new balconies, the whole nine yards externally.
However, there's a big problem with selling thanks to the 15-year assessment. That makes the condo fees almost $700 until then. Although a somewhat similar apartment across the street is going for $275K (asking, not selling), someone in our building on the second floor was listing his at a whopping $150K! and it didn't sell. Unbelievable considering LAST YEAR one sold for $250K. This guy was desperate because it was vacant and he bought a new house somewhere from what I hear. None the less, it didn't sell.
My current mortgage is just a 2-year, which ends in July. So I'll likely take another 2-year or a 5-year variable to keep costs where they are and pray there's no interest rate climb for 5 years (or at least not much).
I'm considering Rent-to-Own or maybe an assumable if that still works these days.
My new tenants are open to a 6-12 month, so I'm thinking 6-months, which would bring to May 2017 incase anything changes with the mortgage.
What would you do in this case?
If the chance ever comes to sell for $225K, I'm in.
But since one already didn't sell, I'm assuming that's not even on the table without losing my shirt.
But what would be your game plan?
Continue to take the $475 loss until rents climb back up? Hold for another five years until sale prices increase? Try to sell creatively via Rent-to-Own or something?
