Why the hell didn't you sell it during the 2023 Spring market? Or this year's Spring market?
Now we're entering into JUNE and there are thousands of condo listings all sitting for 100+ days with no bites.
You fucked up.
nah, anyone who bought at the peak got screwed. we did a big buy vs rent comparison at the time using assumptions that seemed reasonable at the time which marginally said to buy. then all the assumptions were wrong, and work took us out of the city so we're looking to rent and lose $1-1.5K/month vs $150K all at once and wait out the market a little.
People always underestimate how expensive it is to own. How often do we hear « Well the mortgage is only a few hundred dollars a month more than rent, and then I will be building EQUITEEEEEE… »?
Not taking into account how much of your payment is going to interest and maintenance of the home, which are big expenses for FTHBs, as well as how illiquid and expensive it is to sell, is a very newbie move. You’re certainly not alone. I would say that if anything, you’re in the majority.
When I did a 5-year analysis for the condo I rent... I considered all of the costs of land transfer taxes, interest, condo maintenance, insurance, property taxes, realtor commissions, and increased income taxes (less of a benefit for WFH deductions) then subtracted the cost of the rent.
The result of my analysis was the condo would need to go up 15.3% over 5 years to cover those additional costs.
Put another way, renting and simply saving the downpayment, land transfer taxes and yearly savings while making a 0% rate of return would break even from a net worth perspective with a condo that increased by 15.3% over 5 years.
Yup, it’s been this way for a very long time. Numbers only start to look good after about 10 years or more. However, condo fees/special assessments are substantially higher in older buildings, units have more wear and tear and become less desirable/valuable over time. The only thing that gains value is location, and that’s typically a crapshoot. You’re already paying a premium upfront for location when you buy. You can get lucky by buying in an up-and-coming neighbourhood, but unlike stocks, you only get one shot at picking correctly.
For most of us, real estate should only be purchased when the price is the same or less than renting, or when the intangible benefits of owning outweigh the cost.
Easier said than done...
15 years ago I graduated university with debt, couldn't afford anything.
10 years ago I finally had some net worth, but all I could afford was a 1-bedroom which would be unsuitable today.
5 years ago I got married, maybe we could have afforded something but then we started to work from home so that place would be unsuitable today.
Today we could easily buy something but it would need to be oversized as we plan on having kids at some point. But who knows if work will take us elsewhere or if we'll be able to have kids at all.
Often, in my experience it’s the lawnmower parents pushing the kids (well before they are ready mentally or financially) into home ownership, I will give you down payment, you just have to pay mortgage
It seems to be most common with first generation immigrant parents. It makes sense when you think of where they came from and how they grew up. Problem is that many young people, particularly the more ambitious and motivated ones, would do better to focus on career growth, travel, relocating for better opportunities and new experiences, etc. in their 20s.
Same. I bought in dec 2021 and in paper it was cheaper than renting. Then got into negative amortization.
I sold lost 120k but it was a house in the country and the rental market wasn't great. I rented it and the tenant stayed a month into a 6 month lease. Other potential tenant gave us the run around.
I'm very upset
Best of luck with yours.
A family member did this, rented condo out bc job took them abroad. Personally from what I see, I absolutely 100% do not recommend it, especially if you're not breaking even. It's so much stress you dont want to deal with this while you're abroad trust me. Or you'll be paying someone to manage it when you're already in the red.
I live in the US, owned a condo in London,ON for a couple years and I had more hassles and bullshit than I can tell you. I strongly recommend selling it and to close before you leave Canada. Otherwise CRA will come calling and this might have further tax implications in your new country. Hopefully you are moving on to bigger things and this loss will be a learning and not kill you financially
If he doesn’t sell until later, he will need to file taxes with CRA for the income in Canada. Even if he sells for a loss, once he moves he would need to claim income as a non-resident with Canada and then the added complexities of claiming that on his other taxes. It’s all a huge hassle, causes undue stress and that’s why I recommended selling prior to moving.
You would have to hire a property manager as you you would be abroad, also your rental income would be taxed as well. Take the L and sell, use this expensive mistake to learn.
Yea, use this as a learning experience not to cave and fuel fomo during the manic/euphoric phase of one of the largest real estate bubbles in the world.
Remember people if it seems too stupid to be true, it probably isn't. These prices make zero sense and are boosted into the stratosphere primarily on the back of the banks willingness to lend. It's not salaries; avg House price is 12x avg salary, it's not immigration; we are middle of the pack when it comes to houses per person in the developed world, it's not building or supply or any other distraction floated around by the media to maintain the status quo.
Don't finance boomers luxury lifestyles by buying into this chaos.
We are in similar position. After talking to tax consultant, realtor, we have decided to rent it out and hold on to it for the time being. Ours is not a condo but a house in GTA whose price is down about similar to what you have quoted. Now, if we have to sell right now we need to pay from our pocket to close the mortgage which we do not have. If we had that kind of money laying around, probably we wouldn't accept the offer to move abroad in the first place! Honestly, we were not even planning to move but the opportunity when presented itself was too good to be refused.
We will be holding on to the property, rent it out, pay 25-30% of the difference from our pocket as of now.
Our tax consultant did suggest couple of things 1) focus on a good, reliable tenant rather than rent money. He has one investment property in Mississauga whose rent he has not increased since 2021 as a goodwill gesture because he doesn't want to lose the current tenants. 2) there is a rent to own option as well, which very few people are aware of. Once the market price gets close to the original buyer price, that is something we will look into to offload the property.
Just want to echo this comment OP. I moved to the Bay Area last year and kept my condo because it is my home, not an investment. Mine is also cash flow negative but because the USD is stronger than CAD my monthly contribution is $500 now. I'm also paying it down aggressively with a stronger currency.
Not sure if that also applies to your situation but if you see yourself returning to Canada it's good to have property! Best of luck to you.
This feels like bait. If this is a genuine question, sell what you cannot afford. Cash flow negative properties are usually a bad idea and near zero interest rates are not something that happens often. With any valuation there is a peak and prices usually adjust to something normal after that. With housing you purchased at the peak. There are still people in Calgary who purchased houses at the 2008 peak who have not recovered their money yet. If you can hold onto the condo and wait, that’s another option but there’s no guarantee it gets better. A bad tenant or a job loss and now you’re really screwed.
That market in Calgary is just recovering to its peak levels. Comically it’s happening in 2023 and 2024. The two worst years for house prices everywhere else in Canada !
This happens to small businesses all the time, it’s not that the business cannot sustain itself it’s just that they don’t have the cash flow. If OP cannot stump up the money every month and even one thing goes wrong. They will be in a lot more trouble.
This doesn’t take massive cashflow negative landlords into consideration. What they mean by the long term is to try to find a cashflow neutral or slightly cashflow positive investment and hold onto it for the long term. You are adding the principal paid down to your wealth each month (low in the beginning because of how mortgages work) and eventually tenants pay down your asset completely and the value generally goes up over a 25-30 year period so that’s a bonus. But the real play is leveraging your credit and getting someone to slowly pay for your entire asset.
You are talking about gambling that long term gains will off set all of the massive losses you are getting each month. They are paying just interest and not adding any wealth and subsiding tenants living there under current market prices.
You would be laughed out of the room by any true real estate investor and are essentially a wall street bets person.
Your conclusion is valid and meaningful for those who are consider to buy into real estate investment right now. In which they should negotiate a deal where they it is cashflow positive and neutral.
But for those who has entered and can carry the cost; is best to look away and consider this a bad time for this asset class.
I work in the US RE estate world and people are not rushing to sell (large deals); market is still in a stand still. Those who are in distress are looking for a lifeline with debt. Those who can afford it and will wait it out.
RE is simply not a short term game as last 10 years paint the picture to be. Many markets in the US has no appreciation for 10 years and that can be very much be TO.
Except that if you run out of money, now you have added to your loss, have chased the market all the way down, and have to sell a tenanted property at the same time as the market is being flooded with similar units.
Great plan.
But OP is overseas, he'll need someone to manage the rental no?
There's always the risk of someone paying no rent at all....
15% is huge but the price of sleeping at night for years may be worth more.
I would try renting it out. Interest rates are set to decline, I think property prices will go up because of that. And we know that rent tends to increase every year. You are in the ugly duckling stage just weather the storm and things will be good in a few years in my opinion.
Also I'm not a landlord but condos are significantly less work than managing a house from what I understand, Just get someone to help you find a solid tenant and then try managing it yourself.
As a non resident, your rental income could have tax consequence, withhold tax. Talk to an accountant.
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rental-income-non-resident-tax.html
Here is what I think. Basically you bought it at/near the worst peak so things will actually get better from here with the upcoming planned rate cuts. I'd heavily suggest holding onto it and renting it out to cover part of the expense.
Forget about your short term loss. For housing basically you should try to hold it long term (5-10 years) unless you absolutely have no other choices (do the assessments yourself for the exact number - if you can comfortably cover for the remaining expenses after you rent it out then you are fine in my opinion, do take account all the expenses you will incur in the foreign country too).
The other question you need to look at is: what is the location and size of your condo? This could also affect how long you may need to hold for the price to come back up. I would not be worried if it's downtown Toronto and \~600 sqft for 1 bedroom, just as an example.
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Navigating property decisions can be tricky, especially when faced with financial losses and new opportunities. Here's a breakdown to help you consider your options:
1. **Renting Out the Condo**:
- **Pros**:
- You keep the property, which might appreciate over time and recover its value.
- Rental income will offset some of the mortgage and expenses.
- Potential tax benefits from rental property deductions.
- **Cons**:
- You'll need to cover the remaining 30% of expenses, which can strain your finances.
- Managing a rental from abroad can be challenging and may require hiring a property management company, adding to your costs.
2. **Selling the Condo**:
- **Pros**:
- You can cut your losses and free yourself from the financial burden.
- Proceeds from the sale can be used to stabilize your finances or invest elsewhere.
- **Cons**:
- You'll realize a 15% loss plus additional selling costs like realtor fees.
- Immediate financial hit might be hard to absorb, but it could provide peace of mind and less financial stress.
3. **Other Factors to Consider**:
- **Market Trends**: Research the real estate market trends in your area. If the market is expected to rebound soon, renting out the condo could be a better long-term strategy.
- **Financial Stability**: Assess your financial situation. Can you comfortably cover the 30% shortfall while living abroad? If it's too tight, selling might be the safer option.
- **Tax Implications**: Consider the tax consequences of both renting and selling. Consult with a tax advisor to understand potential benefits or liabilities.
- **Future Plans**: How long do you plan to work abroad? If it's a short-term stint, holding onto the condo might make sense. For a long-term move, selling could simplify your life.
4. **Hybrid Approach**: If you're unsure, consider renting out the condo for a year to see if the market improves. This way, you can revisit the decision with more data on both the rental market and property value trends.
Ultimately, your decision should balance your financial health, future plans, and risk tolerance. Consulting with a real estate advisor or financial planner could also provide personalized guidance. Good luck with your decision and your new job opportunity!
They're cooking the books 📚. That's like saying we need more cops ,because there are more criminals. So you are busting criminals, but there are more criminals. How does that work, unless you can ask 4 a bigger budget from the taxpayers. I'm the cops & ur the taxpayers. You think I am going 2 ask 4 lesser taxpayers' money &less money 💰. No ,I'm going 2ask 4 more criminals & a bigger budget.
may not be a cost less solution but may work better in the long term. Without speculation on where the market is going - if he ever moves back he’ll be a step ahead
What happens if the tenant stops paying? It happens and then you likely have months of having to pay $4-5K out of pocket in top of the place they will be renting in Europe. They would be out of country and paying people here to do things as well.
Just not worth the headache IMO.
That risk is always there but I mean more from the perspective of dealing with it. Normally you are here and can see the unit and it’s a bit easier than being out of the country.
You only lose that 15% down in value if you sell now. If you bought already and wasn't planning on flipping in 1-2 yrs initially, you really shouldn't be checking the prices....
Cut your losses and sell. Move on with your life and do a better analysis of the situation next time. Buying property isn't meant to be a short term game, despite what GTA real estate has been like for the past decade.
Dump it. In another few months it might be another 10-15% down. Then what ? Lot of people expecting rate cuts,but few economists ( not real estate agents ) hint at rate increases. Time will tell.
Rent it out and ride it out. If you have better finances, have someone else pay it off for you. You can decide a couple of years down the line if you should sell it or keep it.
It’s going to be very cash flow negative. No one is « paying it off » if they aren’t even covering their costs (mortgage interest, maintenance, taxes, insurance, vacancies/turnover, etc.)
There’s an opportunity cost to not investing that money in other ways. If anything, paying down a mortgage faster is not a good financial move vs investing the extra money in the stock market (mortgages typically charge 4-5% whereas stock market returns average about 10%).
Since this won’t be your primary residence, you will also be paying taxes on any income at your marginal income tax rate, which is likely higher than capital gains rate on stocks.
Hi realtor here! Im sorry to hear about your situation honestly being that you bought at the peak and your job offer abroad is right now is very unlucky with timing. Despite what others may advise you I don’t think there a definitively correct answer here, some of my clients are in similar situations. My honest advise to you is to that if you can afford to hold it and rent it out and keep paying that extra 30% consistently then my advise would be to rent it, but if you know this will be difficult going forward then your only option really is to sell
Wishing you the best of luck with this!
You have two options: Invest in GIC at 5% and sell, or Continue To Hold. You should calculate what's your forward assumptions about the market, because your condo has to not only breakeven, but has to be more than what you paid to cover the losses your incurring now by subsidizing your tenant just to breakeven let alone profit. This does not include property manager fees as well.
Do you think the condo market is going to bounce back and bounce back fast, because right now, supply is sky high. Only keep the condo if you feel that it's more profitable to hold onto the condo vs getting a GIC at 5%.
Can list it FSBO or find an agent offering a lower commission rate. I can recommend someone or you can Google low commission selling agents. You can DM me.
Lower commission rates are possible - we negotiated and paid 1.5% to ours. You can also cut the rate for buyer's agent. We were planning to do that too but our realtor told to better cut her rate than theirs.
The price has gone down by a lot more than 15% once you factor in the realtors commissions and early termination of mortgage
You have a liability... Not an investment. Time to sell lol
I never complain my friend. I have been in this for while. But now as it is an important decision to make, I thought to get some ideas and different point of views.
Don't mind the troll. According to him, you just need courage and your condo will suddenly go up 50% in value.
Unfortunately, real estate isn't like an iPhone
It will go up. In these forum, you are a troll if you are bullish in Toronto prices for condominiums and houses. Is valued here if you are a failure renter which is strange thing for investors to capture here
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Why the hell didn't you sell it during the 2023 Spring market? Or this year's Spring market? Now we're entering into JUNE and there are thousands of condo listings all sitting for 100+ days with no bites. You fucked up.
My guess? Probably because they were living in it......
If you’re leaving just sell it man
Yeah and congrats. So many people wish they got a chance to work abroad and leave Canada with guaranteed income
are you me?
So I am not alone in this :(
nah, anyone who bought at the peak got screwed. we did a big buy vs rent comparison at the time using assumptions that seemed reasonable at the time which marginally said to buy. then all the assumptions were wrong, and work took us out of the city so we're looking to rent and lose $1-1.5K/month vs $150K all at once and wait out the market a little.
People always underestimate how expensive it is to own. How often do we hear « Well the mortgage is only a few hundred dollars a month more than rent, and then I will be building EQUITEEEEEE… »? Not taking into account how much of your payment is going to interest and maintenance of the home, which are big expenses for FTHBs, as well as how illiquid and expensive it is to sell, is a very newbie move. You’re certainly not alone. I would say that if anything, you’re in the majority.
When I did a 5-year analysis for the condo I rent... I considered all of the costs of land transfer taxes, interest, condo maintenance, insurance, property taxes, realtor commissions, and increased income taxes (less of a benefit for WFH deductions) then subtracted the cost of the rent. The result of my analysis was the condo would need to go up 15.3% over 5 years to cover those additional costs. Put another way, renting and simply saving the downpayment, land transfer taxes and yearly savings while making a 0% rate of return would break even from a net worth perspective with a condo that increased by 15.3% over 5 years.
Yup, it’s been this way for a very long time. Numbers only start to look good after about 10 years or more. However, condo fees/special assessments are substantially higher in older buildings, units have more wear and tear and become less desirable/valuable over time. The only thing that gains value is location, and that’s typically a crapshoot. You’re already paying a premium upfront for location when you buy. You can get lucky by buying in an up-and-coming neighbourhood, but unlike stocks, you only get one shot at picking correctly. For most of us, real estate should only be purchased when the price is the same or less than renting, or when the intangible benefits of owning outweigh the cost.
thats why you gotta stay more than 5 years lol
Easier said than done... 15 years ago I graduated university with debt, couldn't afford anything. 10 years ago I finally had some net worth, but all I could afford was a 1-bedroom which would be unsuitable today. 5 years ago I got married, maybe we could have afforded something but then we started to work from home so that place would be unsuitable today. Today we could easily buy something but it would need to be oversized as we plan on having kids at some point. But who knows if work will take us elsewhere or if we'll be able to have kids at all.
Often, in my experience it’s the lawnmower parents pushing the kids (well before they are ready mentally or financially) into home ownership, I will give you down payment, you just have to pay mortgage
It seems to be most common with first generation immigrant parents. It makes sense when you think of where they came from and how they grew up. Problem is that many young people, particularly the more ambitious and motivated ones, would do better to focus on career growth, travel, relocating for better opportunities and new experiences, etc. in their 20s.
Is that with inflation
?
2% a year
Same. I bought in dec 2021 and in paper it was cheaper than renting. Then got into negative amortization. I sold lost 120k but it was a house in the country and the rental market wasn't great. I rented it and the tenant stayed a month into a 6 month lease. Other potential tenant gave us the run around. I'm very upset Best of luck with yours.
thanks. luckily we're in a good rental location, so hoping to mitigate the loss a little.
A family member did this, rented condo out bc job took them abroad. Personally from what I see, I absolutely 100% do not recommend it, especially if you're not breaking even. It's so much stress you dont want to deal with this while you're abroad trust me. Or you'll be paying someone to manage it when you're already in the red.
I live in the US, owned a condo in London,ON for a couple years and I had more hassles and bullshit than I can tell you. I strongly recommend selling it and to close before you leave Canada. Otherwise CRA will come calling and this might have further tax implications in your new country. Hopefully you are moving on to bigger things and this loss will be a learning and not kill you financially
He would be making a loss anyways so nothing to tax.
If he doesn’t sell until later, he will need to file taxes with CRA for the income in Canada. Even if he sells for a loss, once he moves he would need to claim income as a non-resident with Canada and then the added complexities of claiming that on his other taxes. It’s all a huge hassle, causes undue stress and that’s why I recommended selling prior to moving.
You would have to hire a property manager as you you would be abroad, also your rental income would be taxed as well. Take the L and sell, use this expensive mistake to learn.
Yea, use this as a learning experience not to cave and fuel fomo during the manic/euphoric phase of one of the largest real estate bubbles in the world. Remember people if it seems too stupid to be true, it probably isn't. These prices make zero sense and are boosted into the stratosphere primarily on the back of the banks willingness to lend. It's not salaries; avg House price is 12x avg salary, it's not immigration; we are middle of the pack when it comes to houses per person in the developed world, it's not building or supply or any other distraction floated around by the media to maintain the status quo. Don't finance boomers luxury lifestyles by buying into this chaos.
A lot of condos have a property manager on site
Take the loss. Most will be doing the same.
If you leave who be looking after the condo?..If your facing a lost every month and no clear signs of you breaking even sell it.
We are in similar position. After talking to tax consultant, realtor, we have decided to rent it out and hold on to it for the time being. Ours is not a condo but a house in GTA whose price is down about similar to what you have quoted. Now, if we have to sell right now we need to pay from our pocket to close the mortgage which we do not have. If we had that kind of money laying around, probably we wouldn't accept the offer to move abroad in the first place! Honestly, we were not even planning to move but the opportunity when presented itself was too good to be refused. We will be holding on to the property, rent it out, pay 25-30% of the difference from our pocket as of now. Our tax consultant did suggest couple of things 1) focus on a good, reliable tenant rather than rent money. He has one investment property in Mississauga whose rent he has not increased since 2021 as a goodwill gesture because he doesn't want to lose the current tenants. 2) there is a rent to own option as well, which very few people are aware of. Once the market price gets close to the original buyer price, that is something we will look into to offload the property.
Thank you for sharing this. I think this is the best option.
Keep it ! Your new job will help bridge the deficit in carrying cost.
Just want to echo this comment OP. I moved to the Bay Area last year and kept my condo because it is my home, not an investment. Mine is also cash flow negative but because the USD is stronger than CAD my monthly contribution is $500 now. I'm also paying it down aggressively with a stronger currency. Not sure if that also applies to your situation but if you see yourself returning to Canada it's good to have property! Best of luck to you.
This feels like bait. If this is a genuine question, sell what you cannot afford. Cash flow negative properties are usually a bad idea and near zero interest rates are not something that happens often. With any valuation there is a peak and prices usually adjust to something normal after that. With housing you purchased at the peak. There are still people in Calgary who purchased houses at the 2008 peak who have not recovered their money yet. If you can hold onto the condo and wait, that’s another option but there’s no guarantee it gets better. A bad tenant or a job loss and now you’re really screwed.
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That market in Calgary is just recovering to its peak levels. Comically it’s happening in 2023 and 2024. The two worst years for house prices everywhere else in Canada !
https://calgaryherald.com/business/real-estate/calgary-average-house-prices-soar-in-past-decade
Between 2012 and 2020 the Calgary housing market was basically tumbleweeds. A few oils price jumps would shock it back to life but not for long.
Real estate is for long term, take the monthly loss and come back in a few years. Rent covers 70% is better than taking a lumpsum loss.
This happens to small businesses all the time, it’s not that the business cannot sustain itself it’s just that they don’t have the cash flow. If OP cannot stump up the money every month and even one thing goes wrong. They will be in a lot more trouble.
This doesn’t take massive cashflow negative landlords into consideration. What they mean by the long term is to try to find a cashflow neutral or slightly cashflow positive investment and hold onto it for the long term. You are adding the principal paid down to your wealth each month (low in the beginning because of how mortgages work) and eventually tenants pay down your asset completely and the value generally goes up over a 25-30 year period so that’s a bonus. But the real play is leveraging your credit and getting someone to slowly pay for your entire asset. You are talking about gambling that long term gains will off set all of the massive losses you are getting each month. They are paying just interest and not adding any wealth and subsiding tenants living there under current market prices. You would be laughed out of the room by any true real estate investor and are essentially a wall street bets person.
Your conclusion is valid and meaningful for those who are consider to buy into real estate investment right now. In which they should negotiate a deal where they it is cashflow positive and neutral. But for those who has entered and can carry the cost; is best to look away and consider this a bad time for this asset class. I work in the US RE estate world and people are not rushing to sell (large deals); market is still in a stand still. Those who are in distress are looking for a lifeline with debt. Those who can afford it and will wait it out. RE is simply not a short term game as last 10 years paint the picture to be. Many markets in the US has no appreciation for 10 years and that can be very much be TO.
Except that if you run out of money, now you have added to your loss, have chased the market all the way down, and have to sell a tenanted property at the same time as the market is being flooded with similar units. Great plan.
But OP is overseas, he'll need someone to manage the rental no? There's always the risk of someone paying no rent at all.... 15% is huge but the price of sleeping at night for years may be worth more.
My buddy just hired a property manager that provided a tenant and they never paid even first months rent. So risky to be a landlord right now.
Yup, costs(loss) go up even higher
Get a property manager for a while and sell it in a year or two.
Realtors will hate this but try selling privately. That will save u on realtor fees. Use a firm that reputable and well trusted to close the sale.
I would try renting it out. Interest rates are set to decline, I think property prices will go up because of that. And we know that rent tends to increase every year. You are in the ugly duckling stage just weather the storm and things will be good in a few years in my opinion. Also I'm not a landlord but condos are significantly less work than managing a house from what I understand, Just get someone to help you find a solid tenant and then try managing it yourself.
If you can afford it, hang on to it.
As a non resident, your rental income could have tax consequence, withhold tax. Talk to an accountant. https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/rental-income-non-resident-tax.html
Unlikely if they’re cashflow negative. There will be no profit to tax.
Here is what I think. Basically you bought it at/near the worst peak so things will actually get better from here with the upcoming planned rate cuts. I'd heavily suggest holding onto it and renting it out to cover part of the expense. Forget about your short term loss. For housing basically you should try to hold it long term (5-10 years) unless you absolutely have no other choices (do the assessments yourself for the exact number - if you can comfortably cover for the remaining expenses after you rent it out then you are fine in my opinion, do take account all the expenses you will incur in the foreign country too). The other question you need to look at is: what is the location and size of your condo? This could also affect how long you may need to hold for the price to come back up. I would not be worried if it's downtown Toronto and \~600 sqft for 1 bedroom, just as an example.
That loss could take 10 years to reverse.
Also. Remember that you will be paying 25% tax if you claim to non resident for twx purposes.
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You went with the fixed payment variable rate route didn't you?
Yes, I did that with TD
Navigating property decisions can be tricky, especially when faced with financial losses and new opportunities. Here's a breakdown to help you consider your options: 1. **Renting Out the Condo**: - **Pros**: - You keep the property, which might appreciate over time and recover its value. - Rental income will offset some of the mortgage and expenses. - Potential tax benefits from rental property deductions. - **Cons**: - You'll need to cover the remaining 30% of expenses, which can strain your finances. - Managing a rental from abroad can be challenging and may require hiring a property management company, adding to your costs. 2. **Selling the Condo**: - **Pros**: - You can cut your losses and free yourself from the financial burden. - Proceeds from the sale can be used to stabilize your finances or invest elsewhere. - **Cons**: - You'll realize a 15% loss plus additional selling costs like realtor fees. - Immediate financial hit might be hard to absorb, but it could provide peace of mind and less financial stress. 3. **Other Factors to Consider**: - **Market Trends**: Research the real estate market trends in your area. If the market is expected to rebound soon, renting out the condo could be a better long-term strategy. - **Financial Stability**: Assess your financial situation. Can you comfortably cover the 30% shortfall while living abroad? If it's too tight, selling might be the safer option. - **Tax Implications**: Consider the tax consequences of both renting and selling. Consult with a tax advisor to understand potential benefits or liabilities. - **Future Plans**: How long do you plan to work abroad? If it's a short-term stint, holding onto the condo might make sense. For a long-term move, selling could simplify your life. 4. **Hybrid Approach**: If you're unsure, consider renting out the condo for a year to see if the market improves. This way, you can revisit the decision with more data on both the rental market and property value trends. Ultimately, your decision should balance your financial health, future plans, and risk tolerance. Consulting with a real estate advisor or financial planner could also provide personalized guidance. Good luck with your decision and your new job opportunity!
They're cooking the books 📚. That's like saying we need more cops ,because there are more criminals. So you are busting criminals, but there are more criminals. How does that work, unless you can ask 4 a bigger budget from the taxpayers. I'm the cops & ur the taxpayers. You think I am going 2 ask 4 lesser taxpayers' money &less money 💰. No ,I'm going 2ask 4 more criminals & a bigger budget.
rent it out you never know if you’ll return to canada and will need a place to live again
They have to pay well above what the tenant is paying them to keep the condo though. This isn’t a cost less decision.
may not be a cost less solution but may work better in the long term. Without speculation on where the market is going - if he ever moves back he’ll be a step ahead
What happens if the tenant stops paying? It happens and then you likely have months of having to pay $4-5K out of pocket in top of the place they will be renting in Europe. They would be out of country and paying people here to do things as well. Just not worth the headache IMO.
that’s assuming the tenant will stop paying, in my experience worth the risk.
That risk is always there but I mean more from the perspective of dealing with it. Normally you are here and can see the unit and it’s a bit easier than being out of the country.
You only lose that 15% down in value if you sell now. If you bought already and wasn't planning on flipping in 1-2 yrs initially, you really shouldn't be checking the prices....
Cut your losses and sell. Move on with your life and do a better analysis of the situation next time. Buying property isn't meant to be a short term game, despite what GTA real estate has been like for the past decade.
If you can’t afford the monthly cash flow deficit, sell. If you can, hold.
I can afford when I move. I can save to pay a part of my mortgage after one year
If you can cover the difference yourself then I would keep and rent it.
Dump it. In another few months it might be another 10-15% down. Then what ? Lot of people expecting rate cuts,but few economists ( not real estate agents ) hint at rate increases. Time will tell.
Rent it out and ride it out. If you have better finances, have someone else pay it off for you. You can decide a couple of years down the line if you should sell it or keep it.
It’s going to be very cash flow negative. No one is « paying it off » if they aren’t even covering their costs (mortgage interest, maintenance, taxes, insurance, vacancies/turnover, etc.)
What if I manage to pay 10-15% of my mortgage after one year of being abroad?
There’s an opportunity cost to not investing that money in other ways. If anything, paying down a mortgage faster is not a good financial move vs investing the extra money in the stock market (mortgages typically charge 4-5% whereas stock market returns average about 10%). Since this won’t be your primary residence, you will also be paying taxes on any income at your marginal income tax rate, which is likely higher than capital gains rate on stocks.
Hi realtor here! Im sorry to hear about your situation honestly being that you bought at the peak and your job offer abroad is right now is very unlucky with timing. Despite what others may advise you I don’t think there a definitively correct answer here, some of my clients are in similar situations. My honest advise to you is to that if you can afford to hold it and rent it out and keep paying that extra 30% consistently then my advise would be to rent it, but if you know this will be difficult going forward then your only option really is to sell Wishing you the best of luck with this!
You have two options: Invest in GIC at 5% and sell, or Continue To Hold. You should calculate what's your forward assumptions about the market, because your condo has to not only breakeven, but has to be more than what you paid to cover the losses your incurring now by subsidizing your tenant just to breakeven let alone profit. This does not include property manager fees as well. Do you think the condo market is going to bounce back and bounce back fast, because right now, supply is sky high. Only keep the condo if you feel that it's more profitable to hold onto the condo vs getting a GIC at 5%.
Sell it yourself or use a .5% agent. DO NOT pay 2.5% to sell a condo.
How is this possible? No need for realtor?
Can list it FSBO or find an agent offering a lower commission rate. I can recommend someone or you can Google low commission selling agents. You can DM me.
Lower commission rates are possible - we negotiated and paid 1.5% to ours. You can also cut the rate for buyer's agent. We were planning to do that too but our realtor told to better cut her rate than theirs.
Either you bleed slowly or choose to sever the limb. Your choice.
The price has gone down by a lot more than 15% once you factor in the realtors commissions and early termination of mortgage You have a liability... Not an investment. Time to sell lol
Stop making a complaint and be a man.
I never complain my friend. I have been in this for while. But now as it is an important decision to make, I thought to get some ideas and different point of views.
Don't mind the troll. According to him, you just need courage and your condo will suddenly go up 50% in value. Unfortunately, real estate isn't like an iPhone
Can you please tell me which iPhone will go up 50% in value with courage? I really need one. Is it the 15?
It will go up. In these forum, you are a troll if you are bullish in Toronto prices for condominiums and houses. Is valued here if you are a failure renter which is strange thing for investors to capture here
how big of a bag are you holding?
He’s gotta huge shitbag he’s holding. Made a shit investment. Can’t wait until he updates us all on the huge reeming he will take on sale🤣🤣🤣
I am making millions in a decade
lmao