Reader Mail: Should I Sell My Condo in Toronto or Keep It?

In this article, we will explore the question of whether it is better to sell a 600,000 condo in Toronto or keep it as an investment property. The investors overpaid for this property and was purchased in 2018 for 600,000, it is currently worth the same amount with a negative cash flow of 1600 per month.

We will discuss the factors to consider when making this decision to hold or sell the asset and provide some insights from experienced real estate investor Quentin D’Souza.

The Cash Flow Consideration

Quentin D’Souza shares his experience with owning condos as investment properties. He mentions that while some of his condos have performed well, the ones that were owned alongside single-family homes or duplex conversions actually cash flowed mush better and appreciated more. This cash flow was sufficient to cover property management expenses, allowing Quentin to focus on building his portfolio.

Return on Equity

One of the key factors to consider when deciding whether to sell a condo or keep it as an investment property is the return on equity. Quentin D’Souza mentions that his investments in Canada have always performed better than his investments in the US. However, he also acknowledges that his investments in the US serve a different purpose for him. They help to provide him with different streams of income in an asset class he understands.

The Importance of Building a Portfolio

Quentin emphasizes the importance of focusing on building a real estate portfolio. He encourages the listener to make their own decision regarding whether to sell the condo or not. He suggests that the emotional attachment to the initial investment loss might be clouding the judgment. However, he also acknowledges that interest rates can be a challenge in the current market, making it difficult to generate positive cash flow on properties with high interest rates.

Networking and Learning from Other Investors

Quentin advises attending Durham REI meetings and connecting with other investors who are currently buying properties. He suggests talking to them about the type of properties they are investing in and the cash flow they are experiencing. By networking and learning from others, the listener can gain valuable insights into what is currently working in the market.

Taking Advantage of Opportunities in the US

The listener mentions the possibility of investing in the US as they are dual citizens. Quentin shares his own experience of investing in the US and explains that financing options are better for US citizens. He suggests that the listener educate themselves about investing in the US and wait for interest rates to come down before making a decision. Quentin also mentions that he plans to organize a trip to Tampa for Durham REI members to explore investment opportunities in the area.

Structuring Investments and Setting Goals

Quentin discusses the structure he has in place for his US investments, using a limited partnership structure to avoid double taxation. He also emphasizes the importance of setting goals and creating a plan. He recommends coming up with 10-year goals and breaking them down into three-month goals. By creating weekly plans and tracking progress, you can increase their chances of success.

Conclusion

In conclusion, Quentin D’Souza provides valuable insights and advice for those considering whether to sell their condo or keep it as an investment property. He emphasizes the importance of networking, learning from other investors, and setting goals. He also suggests exploring opportunities in the US market and waiting for interest rates to stabilize before making a decision. Ultimately, the investor must make their own decision based on their individual circumstances and goals.