What would you do?

cmontminy

New Forum Member
Registered
Purchase single family house in 2007 paid 260,000$
Put 30,000$ in renovation in it in 2008
In 2009 I moved to Fort Mcmurray and since I was not able to sell my house I decided to rent it. (1200$)
Mortgage payment are 1600$ a month and mortgage renewal is in 2012.

Would you keep the house rented even if it is not covering the whole mortgage payment or would you try to sell it now and pay the pre-payment penalty?
 

dsmandato

Inspired Forum Member
REIN Member
QUOTE (cmontminy @ May 12 2010, 08:28 PM) Purchase single family house in 2007 paid 260,000$
Put 30,000$ in renovation in it in 2008
In 2009 I moved to Fort Mcmurray and since I was not able to sell my house I decided to rent it. (1200$)
Mortgage payment are 1600$ a month and mortgage renewal is in 2012.

Would you keep the house rented even if it is not covering the whole mortgage payment or would you try to sell it now and pay the pre-payment penalty?

First thing I would ask is what is the property worth. Are you able to get at least what you paid for plus the renovation cost?

With $400 in the red without including the other costs (ie insurance, taxes, maintenance, etc) I`d say sell the property and cut you losses. Ask yourself how long can you continue to subsidize the monthly payments? Sometimes these decisions are difficult to make but if it`s a decision between sleeping at night and worrying how you will recover your losses I would rather sell, cut my losses and look forward to the next opportunity.
 

Thomas Beyer

Senior Forum Member
REIN Member
QUOTE (cmontminy @ May 12 2010, 08:28 PM) Purchase single family house in 2007 paid 260,000$
Put 30,000$ in renovation in it in 2008
In 2009 I moved to Fort Mcmurray and since I was not able to sell my house I decided to rent it. (1200$)
Mortgage payment are 1600$ a month and mortgage renewal is in 2012.

Would you keep the house rented even if it is not covering the whole mortgage payment or would you try to sell it now and pay the pre-payment penalty?

What is it worth today .. roughly ?

Also, can you afford $5000/year in losses .. say for 2 years ?

If so, then hold as Cold Lake has much going for it such huge air force base, many new construction/development projects and new oilsands projects and as a gateway to SK oilsands which are very difficult to access from SK but better from the AB side !

Likely that 10K loss will be made up through a 4% appreciation in 2 years.

However, if your view on Cold Lake is bleaker than mine and if 10K loss is hurting you emotionally then, as Domenic suggested, cut your losses and move on !
 
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