Should I sell my house and just invest the money elsewhere, or should I keep it and rent it out?

Category: Houses

 

Hi David, 

I have a detached home at Woodbine and Danforth. It has a basement apartment that I already rent out and is a five-minute walk to the subway.

I’d like to move in with my significant other, who rents a place downtown.

My question is: Should I sell the house and just invest the money elsewhere (my significant other isn’t ready to buy something together), or should I keep it and rent it out?


 

Hi Vic,

 

There’s an argument to be made either way here.

Keeping the property makes a lot of sense, given the current state of Toronto’s market.

It also makes sense to take the money and run, given the 20% increase in values last year, and the constant calls from analysts that we’re in a bubble.

I’ve written a lot on my blog in the past week about Toronto’s future, and how I think despite all this bubble-talk, I think we may be in for continued gains.

In the end, it’s about your risk tolerance, your financial position, and then how you would like being a landlord long-term.

If you have another investment vehicle for the money, it could be a good time to take the tax-free capital gain.  But you have to balance that against a reasonable probability that we see continued gains in the market.
David.

2 Comments

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  1. Condodweller says:

    Definitely do some what if scenarios with the RE market lower/higher/same and factor in potential income vs transaction costs if you think you will want to live in a house again. Seek professional advice if you don’t have the confidence to do it yourself. FYI you can’t “accidentally lose” the principal residence exception. Oh, and be careful with free advice on internet forums/blogs 🙂

  2. downtown says:

    I think I would ask for tax advice before making this decision. You wouldn’t want to accidentally lose the principal residence exemption by renting out the whole house. I expect there are ways to ensure you don’t lose it, but you’d definitely want to have thought that through first.

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