Real Estate

Sell a condo to buy a condo

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  • May 8th, 2019 3:36 pm
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[OP]
Sr. Member
Dec 28, 2010
679 posts
280 upvotes
Toronto

Sell a condo to buy a condo

Have a condo 1 bed 1wash in yonge/bloor area- one of the older buildings. Held it for 6 years now.
Rented to long term tenant. We end up paying $135 on top to cover the maintenance+property tax : thnx to every increasing maintenance and last years mrtg rate hikes . There was also Kitec Replacement last year.

Coming up for mrtg renewal in Sept. Thinking of selling this and re-investing most of the proceed in a 3-4 year old 1+1 bed - Mississauga downtown condo.
- Will get similar rental rate (as the current tenant at dwntn )
- fairly newer building, less maintenance
- less mortgage payments. - because of large down-payment.
- Probably end up $600-$700/month in green.

Not sure, if this is the right move as keep on hearing that Downtown is the place to hold for next many years. But again, the transaction costs might not be worth it.
Just wondering if re-investing from one market/area to another cheaper one is what people recommend.
5 replies
Deal Fanatic
Feb 22, 2011
9610 posts
11797 upvotes
Toronto
You will have to pay capital gains tax on half the gain, which could be a lot. Plus realtor fees, taxes and commissions. If you can post some more numbers it might be easier to see if it's worth it but I highly doubt it.

What you could do is extend out your mortgage at renewal, so if there is 20 years left refinance it out to 30. This could knock $500 or more off the mortgage payment depending on how high the balance is. Then instead of paying $135 you are getting $365 profit.
Deal Guru
User avatar
Mar 23, 2008
11890 posts
8141 upvotes
Edmonton
Another option is to pull out equity as a HELOC and invest that in a second property.

C
[OP]
Sr. Member
Dec 28, 2010
679 posts
280 upvotes
Toronto
nice. thanks for the above options...those look like better than taking a high transaction hit with the selling and buying..
[OP]
Sr. Member
Dec 28, 2010
679 posts
280 upvotes
Toronto
mazerbeaner wrote: extend out your mortgage at renewal, so if there is 20 years left refinance it out to 30. This could knock $500 or more off the mortgage payment depending on how high the balance is. Then instead of paying $135 you are getting $365 profit.
Is this a straightforward process , possibly renewing with same lender? But, then wouldn't one want to pay off sooner.
Paying 135 probably not pinching it's just the untapped equity that is just sitting there....
Deal Fanatic
Feb 22, 2011
9610 posts
11797 upvotes
Toronto
Karma2000 wrote: Is this a straightforward process , possibly renewing with same lender? But, then wouldn't one want to pay off sooner.
Paying 135 probably not pinching it's just the untapped equity that is just sitting there....
It's a refinance, but it's a whole lot easier than selling a condo and buying a new one.

It's a personal decision, for me since the interest is tax deductible I have 0 interest in paying it off sooner. If anything I would take the extra cash flow and pay off my house since that interest is not deductible. If your house is already paid off then use the extra cash to invest in something else.

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