Sell existing home or make it investment property

It sounds like you already know that tenants will abuse the house.
They won’t necessarily be smashing tiles but they won’t treat it like you do.
Basically what I’m trying to say is if you’re planning to sell it in the next few years, better not to rent it out and just sell it while it looks renovated.
If you want to keep it as a long term investment (5+ years) then rent it out and let the tenants do their wear and tear.
Anyways In 5 years the house will likely be worth more than it is today so you’ll still come out on top. And you might get lucky and get clean tenants if you vet them well.

If you want to keep it long term I think it's a good idea.
The horror stories are exaggerated since that's all you hear, the Toronto Sun is not going to post a headline : the tenant paid on time this month and didn't burn the house.

There are many good tenants out there but you hear about the bad apples.
It's true that the tenants won't look after the property the same way the owner would so it would be better to rent out a place with basic finishes, but depending on the area better finishes may demand slightly higher rent.

I would keep both if you're financially able to
If you're scared of renters destroying your home, you just need to screen them very strictly
And potentially drop $100/$200 a month to secure an amazing tenant

In the long run, the damage cost from a bad tenant may be way over the $100 discount a month you give to secure a great tenant

If you rent you have the luxury to screen very carefully. If it takes a long time to find someone you are very happy with then you will need to not rush.
You should also get help understanding the laws and how to best protect your interests.

In Ontario things are very tenant oriented but that does not mean you can't make it work though it does take a lot of prudence and a fair bit of luck to not get burned when the deck is stacked against you. There is an Ontario landlords forum, they charge money to join and presumably get message forum access but its worth it to ask questions on how to protect your interests if you decide to go the landlord route.

Tenants will cause more wear then you would. Make sure you put a good percent of the rent aside to fix this. If you can't accept this then don't rent.

Also don't rent to family or friends. It may seem like they are people you know what can go wrong. The problem is you find out who they really are, if they are slobs or they think that being a friend or family that they can get more leeway out of you then you will wish you had never rented to them then the relationship is trashed. And if its family its not like you can replace them with new family. From sob stories that they expect you to accept because of the relationship or their money troubles or their financial priorities is fun things instead of rent to you, many expect that you owe them help or understanding becasue of the relationship. You will learn quickly that in many cases family-friendship-money doesn't mix. And you can't go back in time and make different choices once this is done. They will be pissed off at you for imposing consequences of their actions upon them.

All that said why do you want to keep the house? To move back to someday? Because you like it and didn't really want to move? So you can move back later? Financial appreciation? Something else?
There are many who want to get loans or a reverse mortgage to get money to invest in the stock market for greater returns so if this is about money you should probably sell and invest. If its about something else make sure you identify exactly what so you can make the best decision on what to do.

Depends on where it's located and potential of future appreciation. Without that it's hard to answer, personally I like holding long unless there was a VERY good reason to sell.

At face value judging by your first post I'd lean towards selling to cash in on a great seller's market as the pop you get from this market will take a while to be made up in rent. The house will also get worn out much quicker if it's currently newly renovated. You will get a premium for that now in its current state.

When I had to relocate temporarily 2 years for work I decided to keep my place vacant. Too much hassle and if you do get one of the bad apples it will not be worth it. Also do the math on your taxes as it is added to your income.

Ontario? forget it, crazy one-sided rental laws.

Just sell it imho. If this hot seller market is not a good time to sell, when is it?
plus you wont have capital gain exemption on rental.

I'd say rent it. Just vet your applicants super carefully. I think there's going to be a huge rental supply problem soon with so many landlords pulling out of the rental market and so many tenants with shit credit now. Soon there will be hordes of people offering 6 months upfront for a place.

The other day apparently a renter with a good IT job at a bank was whining on some fb group because he was surprised his credit went to shit from not paying rent. He bought a Peloton with his rent money instead. Hope he enjoys being homeless...

TwinkoStar wrote: ↑ I'd say rent it. Just vet your applicants super carefully. I think there's going to be a huge rental supply problem soon with so many landlords pulling out of the rental market and so many tenants with shit credit now. Soon there will be hordes of people offering 6 months upfront for a place.

The other day apparently a renter with a good IT job at a bank was whining on some fb group because he was surprised his credit went to shit from not paying rent. He bought a Peloton with his rent money instead. Hope he enjoys being homeless...

I think you are too optimistic. Government will also bend their way to buy vote. Landlords will always foot the bill. Guess what, they will at some point ban credit checking if a mass of these non-paying tenants cry about bad credit preventing them from finding a place.

seatiger wrote: ↑ you wont have capital gain exemption on rental.

This is a very good point.

You could test the rental waters first to see what sort of tenant is repsonding and if it's not gold standard, It doesn;t seem like you're pressed for funds so if that market doesn't work out you can always sell at the end of September - the next best time of year to sell.

pmg2021 wrote: ↑ I have purchase new home. Our existing home is nicely upgraded. I have to make a decision of keeping it vs selling it. Because of low interest rates I am very much inclined to keep it. I have 1.59% fixed 5 year or 1.25% variable rate for refinance.
I am very confused reading all horror stories for renters in this forum.

I am also worried if tenant damages the property or abuse it eg whole house has hardwood, kitchen , washrooms upgraded with nice granite counter tops, all high end appliances.

what would be the suggestions from the folks on this forum? I am located in Ontario (GTA), its a semi detached house with basement finished.

Thanks, yes in short term I am not pressed but if I can't rent to good tenant than I don't want to keep paying out of pocket my refinance mortgage payments.

Btw why September is also best time to sell , I thought by that time kids schools start.

licenced wrote: ↑ You could test the rental waters first to see what sort of tenant is repsonding and if it's not gold standard, It doesn;t seem like you're pressed for funds so if that market doesn't work out you can always sell at the end of September - the next best time of year to sell.

Can someone share or suggest me the steps to do good screening and how to put up good lease so that I can cover myself as much as possible?

I think in some other thread I read about some package from a paralegal to start this.

What do we think the increase in next 5 years vs the bidding wars happening now.

Ofirsc wrote: ↑ It sounds like you already know that tenants will abuse the house.
They won’t necessarily be smashing tiles but they won’t treat it like you do.
Basically what I’m trying to say is if you’re planning to sell it in the next few years, better not to rent it out and just sell it while it looks renovated.
If you want to keep it as a long term investment (5+ years) then rent it out and let the tenants do their wear and tear.
Anyways In 5 years the house will likely be worth more than it is today so you’ll still come out on top. And you might get lucky and get clean tenants if you vet them well.

Just to share with folks here - Property is semi detached (9 years old) , prime location in Mississauga. 4 bedroom with all bell and whistles someone can think of + professionally finished basement

Comparable sold for 1.18 M few days ago and that is 3 bedroom only.

pmg2021 wrote: ↑ Btw why September is also best time to sell , I thought by that time kids schools start.

Because it is the 2nd best time to sell on the calendar and you have 5 months to land a good tenant.