You love your home - we know you do! Many people want to keep their home and rent it out, rather than sell it. Here are five factors to look at (sources by us and top financial advisors online):
- Will this property CASH FLOW? If you want to invest, that investment must make money. If after all expenses (including mortgage) do you make an extra profit? The highest return is best for your future. Your money deserves to make money. This leads to...
- What’s my return on investment? If your home is giving you only a 10% return but you could get 15-20% on a multiunit purchase... why would you limit your early retirement money?
- Consider the taxes - when you sell your principal residence, there are NO CAPITAL GAINS. But if you keep your house and rent it out, there will be CAPITAL GAINS paid to the government PLUS a lot of tax paperwork and possible accounting fees.
- Does the future look bright? We can’t predict the future. In most areas, Ottawa sale prices have decreased over the last 5 months by about 10%. Protect yourself and have something to hold long-term.
- Can you handle tenants? There are good and bad experiences. Research them. Are you willing to put the time and money to rent, repair, and deal with complaints as they come... and they will come. Whether a new or old house, people need attention and service. Extra time, effort, and money will need to be invested.
If you are trying to make that decision right now, take a look at the five factors outlined above and make the choice that works best for you, your family, and your financial future.
Moe is a current and active investor/landlord… give him a call as he would be honored to help you with the decision...
Call today at 613-299-3100. No obligation!