Selling vs Renting
We met with an owner today who had a property and was unable to sell it without a drastic discount in the current market as she needed the equity to be transferred to a recent purchase.
After crunching the numbers, it turned out that by renting she would be about $500 better off by retaining the suite and renting it out through Downtown Suites.
How did we arrive at this number? By determining her net equity in the old suite after selling, then calculating how much the new mortgage would be lowered by reducing the equity amount compared with the rental income, less expenses.
This one example shows a very good reason why you should consider renting as opposed to selling.
In addition, consider this:
- If your property is sold you may not be able to get back into the market so easily later on.
- Rents will go up over time, we are allowed to raise rents by 4.3% annually ( this increase % fluctuates yearly and is set by the provincial government.)
- Â The principal owing will reduce as it is paid down, providing you with more monthly income.
- Â The tenant will pay most of the costs for your holding the property.
- Finally, the suite of course will continue to appreciate as well over time.
This particular suite was what we call a blue chip investment, right on the water front on Marinaside Crescent in Yaletown. They are not building any more real estate there and this suite will definitely continue to be more valuable and sought-after.
If you are currently trying to sell your suite in this depressed market, we encourage you to discuss with us at Downtown Suites how we can maximize your rental income and preserve your investment.
#1205-1495 Richards Street