Thinking of upgrading to a bigger home, but can’t decide if you should sell your current property, or rent it out as an investment property?
As a landlord, there is no question that Guelph and area has a very strong rental market. According to the CMHCs Rental Market Report for the Guelph CMA (2018) the vacancy rate is at a low 1.4 percent with an average rent up 4.1% to $1,109 per month. So if you can afford to, now is a great time to upgrade into something bigger, and keep your current home as an investment property.
“Provided you can afford it, you could make yourself income from the cash flow, and asset appreciation, if you hang onto your home and sell in the next two to three years.” – Adam Stewart, Realtor, Chestnut Park West
Hear are the top #3 considerations to help you make the best decision for your situation…
CAN YOU AFFORD TO KEEP YOUR HOME AS AN INVESTMENT PROPERTY?
If you do decide to rent out your home, you will still have your usual rates to pay, plus ongoing maintenance and repairs. With a rental, hot water systems can fail, and air conditioning systems may need work. So provided that these costs won’t stretch you too thin, I would recommend holding onto your home for another two years or so.
CAN YOU AFFORD TO UPGRADE WITHOUT SELLING YOUR CURRENT HOME?
Ideally, the choice to maintain your property and rent it out will still allow you to upgrade and afford the home you want. Sometimes by selling the property you could borrow an extra $100,000-$200,000… so maintaining your home and renting it out may reduce that capacity.
It’s a great time to see what’s around, and speak with your lender to see what you can afford. The lending rate is also nearing historic lows, so it’s an opportune time to get your finances in a position to upgrade, and secure some long-term capital growth.
IS BEING A LANDLORD FOR YOU?
If you find you can afford to keep your home as an investment property, consider whether you have the time, patience, and desire to manage your rental yourself, or if you’d like to hire a property manager to do it for you.
Some of the most important tasks of a landlord (or property manager) are:
Finding a reliable tenant that pays rent on time and maintains your property.
Conducting regular routine inspections on the property.
Organizing prompt maintenance and/or repairs on the property.
Ensuring all legal paperwork and documentation are filled out correctly and signed (e.g. tenancy agreements, property condition reports, inspection reports, repair requests, etc.).
If you work full-time and have a family, you may find it difficult to give your tenant and rental the time and commitment it needs - it totally depends on your circumstances, and head space.
AND IF YOU’D LIKE A SECOND OPINION ABOUT WHETHER TO SELL OR RENT YOUR PROPERTY IN THE CURRENT GUELPH MARKET, FEEL FREE TO CALL ADAM AT 519.265.2602. HE’D BE MORE THAN HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE.