Real Estate

Sell real estate and rent?

  • Last Updated:
  • Feb 21st, 2022 6:54 pm
[OP]
Newbie
Oct 24, 2009
37 posts
58 upvotes

Sell real estate and rent?

With all the talk around a market crash coming soon. Is now a good time to sell and wait out a market cool down?

I'm hearing from family and friends that these prices are not sustainable and with CERB running out as well as with impending white collar job layoffs, would it be a good time to cash out and just wait a bit?

There's also the fact that Condo market is softening and the Air BNB units are all up for sale.

Please provide your thoughts, thanks.
49 replies
Sr. Member
Jan 22, 2012
645 posts
257 upvotes
Bradford
Who knows?
Some people think the market will stay the same or prices go up 10%. Some people feel the prices will come down.

My personal opinion is it will depend on where you live. I believe some markets will go up. Where I live (about an hour north of the GTA) houses are selling with multiple offers (my friend just sold and there were 17 offers on the house with all but 2 being from Toronto. People seem to be moving from Toronto to get more land, etc. I think quarantining with kids in a townhouse or condo/working from home has changed a lot of people’s mindset.

At the end of the day, you could sell and cash out and then the market may cool and you win. You could sell and prices keep climbing. I think every market may be different.
Deal Guru
Feb 9, 2009
12363 posts
11258 upvotes
Can you family also tell me the numbers for this friday's lotto jackpot?
Deal Fanatic
User avatar
Oct 16, 2008
9753 posts
4054 upvotes
Vaughan
When we moved in our new built 19 years ago, my neighbour did that after 2 years; houses in our area went up near 4 folds. Nobody knows; it's a bad idea to sell, rent until housing market is soften. You may rent longer than expected, you lose at end.
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Newbie
May 6, 2020
25 posts
23 upvotes
The rental market in gta is pretty crap right now with low inventory and no real drops in price. Personally we choose not to continue to rent because of this.
[OP]
Newbie
Oct 24, 2009
37 posts
58 upvotes
Sanyo wrote: Can you family also tell me the numbers for this friday's lotto jackpot?
The Toronto unemployment rate is around 12% right now. And my friends who work in the big 5 banks are hearing whispers of big layoffs coming in early 2021. In fact, some of the banks did massive layoffs back when they had record profits...

With white collar people getting laid off, don't you think sell offs are inevitable?
Member
Jun 6, 2014
298 posts
128 upvotes
Toronto, ON
I've tried to figure this out again and again and still come back to this:
Sell house for $1M with 5% commission = 50K
Buy house for $900K in Ontario, land transfer tax is about 14.5K
Buy in Toronto, land transfer tax another 14.5K
Total cost of move 80K plus moving and other expenses
I really don't know how people flip houses for profit. Maybe it worked a few years ago, but as far as I can tell, transaction fees eat up all the profits.
Deal Addict
Nov 2, 2014
1098 posts
429 upvotes
Scarborough, ON
icedtea365 wrote: I've tried to figure this out again and again and still come back to this:
Sell house for $1M with 5% commission = 50K
Buy house for $900K in Ontario, land transfer tax is about 14.5K
Buy in Toronto, land transfer tax another 14.5K
Total cost of move 80K plus moving and other expenses
I really don't know how people flip houses for profit. Maybe it worked a few years ago, but as far as I can tell, transaction fees eat up all the profits.
Don't you mean 3.5% total commission?

Read the Apprenticeship of Duddy Kravitz and keep buying real estate!
Deal Guru
Feb 9, 2009
12363 posts
11258 upvotes
Hewhewhew wrote: The Toronto unemployment rate is around 12% right now. And my friends who work in the big 5 banks are hearing whispers of big layoffs coming in early 2021. In fact, some of the banks did massive layoffs back when they had record profits...

With white collar people getting laid off, don't you think sell offs are inevitable?
It’s at 12%... before it took into account phase 2 opening and phase 3 coming in the next maybe 2 weeks.

Yes some industries will be hit — travel, Canada’s wonderland, etc.

But past that most people will be back to work by early August.

Also will the banks lay-off? Who knows. Look at the market right now it’s insanely busy. The key will be to see mortgage and loan delinquency rates. I don’t see why a ton of white collar jobs will disappear. Tech, medical, etc is on fire right now.

Let’s face it the people buying aren’t your coffee pourers it’s the tech, it’s the professionals, etc

What’s going to happen in 2021 no one knows but your going to spend all that money to sell, rent, then buy again... that’s maybe 100k+ plus right there. Will the market drop that much? Unless you catch a lucky break I doubt it
Deal Guru
Feb 9, 2009
12363 posts
11258 upvotes
icedtea365 wrote: I've tried to figure this out again and again and still come back to this:
Sell house for $1M with 5% commission = 50K
Buy house for $900K in Ontario, land transfer tax is about 14.5K
Buy in Toronto, land transfer tax another 14.5K
Total cost of move 80K plus moving and other expenses
I really don't know how people flip houses for profit. Maybe it worked a few years ago, but as far as I can tell, transaction fees eat up all the profits.
The main way is buy a small house on a huge lot and tear it down.
Newbie
Apr 9, 2020
92 posts
79 upvotes
Hewhewhew wrote: With all the talk around a market crash coming soon. Is now a good time to sell and wait out a market cool down?

I'm hearing from family and friends that these prices are not sustainable and with CERB running out as well as with impending white collar job layoffs, would it be a good time to cash out and just wait a bit?

There's also the fact that Condo market is softening and the Air BNB units are all up for sale.

Please provide your thoughts, thanks.
You only sell when your friend and families sell their houses :)
Deal Expert
Feb 29, 2008
18728 posts
16943 upvotes
Tarrana & The Ri…
If you listened to family and friends 5 years ago you’d probably hate them right now. Talk to professionals, do your own research. Never time the market. If you’re not looking for a property then don’t sell.

Had a friend try this about 2-3 years ago against my advice and he told me he regretted selling and renting. He spent so much money renting and in that span his property went up maybe $150k plus he souls have paid down 2-3 years of mortgage.

Never time the market. Especially in this way. You will lose.

I talked about layoffs in the banking sector months ago. There will be layoffs in 2021 after those projections come in. Banks are always laying off people anyways....I see 2021 being no different.

As for the unemployment rate. It should get to single digits after we get full re-opening and may rise again as not all of the jobs are coming back. One thing to keep in mind is People are picking CERB over going back to work. There’s a lot of voluntary unemployment and some businesses are having trouble finding workers. When CERB is cut off, we will see more people working.

Bumpy ride ahead but I wouldn’t go sell and then rent just because...especially if you don’t have to sell anytime soon. Panic selling whe you don’t have to is not smart.
Member
Apr 15, 2009
287 posts
293 upvotes
toronto
Ask yourself what’s the end goal? Rent until market goes down10% ,20% ,30% and then buy in again? Someone explained above that just cost of selling and buying is almost 10%. So 10% drop is not worth it. So maybe 20% drop? How long will that take? A year/ two years / 3 years.. 3 years of renting is probably worth another 5-10% of the property cost. So now you’re already out of pocket 15% meaning 15% drop just to break even. So.. you need 20% drop in real estate to make 5% profit over several years. And what is a chance of 20% or more drop? How many times did it happen in the last 100 years? 3,4 times maybe . So those are 4 out of a 100 years . So this back of the napkin calculation says: you got 4% chance that this happens and you will make 5% profit. And 96% chance that you just lose money. What do you think?
Even if you l’re right but you time it wrong.. say you sell now, goes up 10% one more year and then drops 20%.. well now you need 30% drop. With each year passed your chances are smaller and smaller until you’re finally priced out of the market.
Deal Fanatic
Mar 27, 2004
7380 posts
5333 upvotes
Toronto
banks layoff when they make record profits as well. timing the market..good luck.
Full-time Realtor
Deal Addict
Nov 23, 2003
2159 posts
642 upvotes
Hope you didn't. Would have been one of the ..if not the biggest blunder of the lifetime.
Newbie
May 15, 2008
48 posts
28 upvotes
I purchased in 2021 in Calgary and I am sure glad I did! My family & friends were telling me to wait but if I did, I would have been priced out based on what is happening in the Calgary market right now.

At the end of the day, a house is a home to live in.
Deal Addict
Jul 3, 2007
4036 posts
4519 upvotes
Toronto
Hewhewhew wrote: With all the talk around a market crash coming soon. Is now a good time to sell and wait out a market cool down?

I'm hearing from family and friends that these prices are not sustainable and with CERB running out as well as with impending white collar job layoffs, would it be a good time to cash out and just wait a bit?

There's also the fact that Condo market is softening and the Air BNB units are all up for sale.

Please provide your thoughts, thanks.
ive been thinking of selling as well.... i posted a poll the other day and almost half of people think this market has another 20-30% in it this year, crazy...

when you take a step back and look at whats going on, its insane that starter detached homes in the GTA are now about 1.5 million.... that is absolutely nuts compared to the US which is our closest comparable
and many GTA style city areas are about $500k - 800k canadian dollars to get into ,.,..

I noticed there is some smugness now in the GTA with RE , people think oh we're special, immigration, etc. its getting delusional

gas is closing in on $2 a litre soon and everything from food to services is up huge in price, next is the rate hikes.... gonna be very interesting to see how people handle these costs in the next few years with massive mortgages to carry
Deal Expert
Feb 29, 2008
18728 posts
16943 upvotes
Tarrana & The Ri…
Had a friend that sold and rented. I told him not to but he did. He ended up renting for 2 years and at the time couldn’t afford anything so had to buy new in Durham. He actually came out very well because the house he bought for 800k is likely worth double due to the pandemic. I think that saved him because he lost a lot of purchasing power over those 2 years. Sometimes you win by pure luck but most of the time you lose when timing the market.

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