Sell my house, buy 2 condos, travel and see what I want to do in my life.

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burntwood
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Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by burntwood »

[Thread updated, see below. --admin LadyGeek]

Any thoughts on this one?

I bought a house 11 years ago off my accountant. She gave me a 2nd mortgage and that helped me buy this house in Vancouver BC. I couldn't have bought just any house at the time as I wouldn't have qualified.

This house I bought is a big house on a lot. House has 8 bedrooms and 3 bathrooms, 2 kitchens.. part of that being a legal suite in the basement. I've always rented out the basement suite and had 3 international students renting rooms upstairs with me.

That's helped me pay all the bills for this 11 years, and I've needed the rents to make it work. But, it has its drawbacks. Living with roommates is at times a pain, being a landlord to the suite is a hassle at times too.

Since buying it my daughter and grandkids have moved way over on the east coast for work. I've never particularly liked the area that the house is in, but it was the only house I could buy, and nowadays I'm really not liking the area at all.

In winter I really can't stand the 5 + months of dark and rainy times, and feel like I'm tied to the house and hard to get away.

Sadly my father died recently. I'm 58 and it got me thinking that I'd like to sell this house and do something different.

I'm not sure exactly what it is I want to do, but I think it'd involve some travel, maybe some time back in UK where I lived up until age 32.

I'd have about 750 to 800k in my hand if I sell my house, that's how much it's gone up since buying it.

I have a one man handyman business that I like doing part time (but not full time) and I can comfortably earn $800 a week working 10 or 12 or so hours. I could see me doing that for another 10 years if health permits.

I have a bit of pension coming from the UK and Canada, but I really have no idea how much. Maybe it's 1k a month

Recently I've been enjoying a new hobby of mountain bike riding in a nearby town called Squamish. It's well known for outdoors recreation and is an hour away from world class ski resort of Whistler B.C. There's a big ski resort slated to be built in Squamish, also an outdoor wave/surf park. So it has potential.

At the moment it's a bit quiet for me to live there full time. But I have this new appreciation for the outdoors lifestyle.

But what I thought about doing is this;
1. Sell my house that I'm really tired of and net 750 to 800k
2. buy 2 brand new condos in Squamish for 350k each. But just put down what I'd need to satisfy banks. Let's say it was 50% each condo. So of my 750/800k from house sale minus 350k leaves me with 400 to 450K. Then the rents I'd get from them would cover everything else, prop tax, insurance etc..
3. and this might sound a bit whacky, but I think it would work for me. I'd rent an apartment in the west end of Vancouver down by the beach for $1500 a month in my friends building. To buy there is really expensive and would chew up my 750k from sale. Just doesn't seem worth it. So I'd just rent, as I'd be on a mission to see what I want to do with my life, and I could give up the rent and live in another country etc...
4. If/when the ski hill gets built (projected 2025, but who knows really) I could always move up there and enjoy life in this new ski town and I'd have one apartment to live in and one paid off by about 60% to rent out or sell or air bnb it.
5. I'd guess that the apartments in Squamish will be worth considerably more in the future as it's up and coming and there are big plans for the area.
6. the 400 to 450K, some if it I'd put to one side to travel and enjoy, help daughter with a downpayment. But say I had 250 to 300k left, I'd have to figure out investing other than real estate, of which I no nothing about stock markets etc...

What do you guys think? Any replies appreciated.
birnhamwood
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by birnhamwood »

"In winter I really can't stand the 5 + months of dark and rainy times." Would the weather be much different in Squamish, just fifty miles away?

"I'm not sure exactly what it is I want to do." Why not wait a year or two until you're more certain?

" I can comfortably earn $800 a week [handyman]." Would this hold true if you moved to another location?

" I'm 58." Would your small pension and rental and handyman income carry you comfortably 25 to 30 years into the future? Would you be able to financially help your daughter/grandchildren?

Would the $800K stretch on out as you might hope, especially since it's not free money (it's your housing).

All in all, you might think this through a little more.
carmonkie
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by carmonkie »

On your original post you stated that being a landlord is a hassle, and you are thinking about becoming a landlord again. Just does not make sense to me.

2 condos is 2x insurance, 2x taxes, 2x maintenance, 2x everything...

I think starting with downsizing is a good plan, but you still need a lot to figure out what you really want to do.
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celia
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by celia »

birnhamwood wrote: Tue Jul 07, 2020 2:54 pm "In winter I really can't stand the 5 + months of dark and rainy times." Would the weather be much different in Squamish, just fifty miles away?

"I'm not sure exactly what it is I want to do." Why not wait a year or two until you're more certain?...


All in all, you might think this through a little more.
+1

At half-way through the post, I thought you were going to say you want to buy one condo near your daughter/grandkids and one in another country (post title says you want to travel). Sounds like you don’t know what you want. Without knowing that, how can you plan to get to your goal?
I have a bit of pension coming from the UK and Canada, but I really have no idea how much. Maybe it's 1k a month
I’d start here and then figure out how you can support yourself for the next 40 years, should you be unable to work any more. (It only takes one accident to become disabled.)
Topic Author
burntwood
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by burntwood »

carmonkie wrote: Tue Jul 07, 2020 3:33 pm On your original post you stated that being a landlord is a hassle, and you are thinking about becoming a landlord again. Just does not make sense to me.

2 condos is 2x insurance, 2x taxes, 2x maintenance, 2x everything...

I think starting with downsizing is a good plan, but you still need a lot to figure out what you really want to do.
I'd use a rental agent. I've done it before with 2 condos I owned in Chilliwack. It was hassle free and I didn't really think about them until I sold.
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burntwood
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by burntwood »

celia wrote: Tue Jul 07, 2020 3:43 pm
birnhamwood wrote: Tue Jul 07, 2020 2:54 pm "In winter I really can't stand the 5 + months of dark and rainy times." Would the weather be much different in Squamish, just fifty miles away?
Squamish is the same climate as Vancouver, but I wouldn't be in either place as I'd have sold my house and be travelling in winter.

"I'm not sure exactly what it is I want to do." Why not wait a year or two until you're more certain?...

+1

I'd just set off on an adventure. There would be no certainty to it, that's how adventure is I think.

At half-way through the post, I thought you were going to say you want to buy one condo near your daughter/grandkids and one in another country (post title says you want to travel). Sounds like you don’t know what you want. Without knowing that, how can you plan to get to your goal?

Actually I said I wanted to travel, not buy a condo in another country and live in it.
I have a bit of pension coming from the UK and Canada, but I really have no idea how much. Maybe it's 1k a month
I’d start here and then figure out how you can support yourself for the next 40 years, should you be unable to work any more. (It only takes one accident to become disabled.) Well that's a go get it attitude to take! lol..
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burntwood
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Sell my house, but where to live then?

Post by burntwood »

[Thread merged into here, see below. --admin LadyGeek]

Newbie here.

I have a personal finance meets life questions kind of dilemma.

I bought an 8 bedroom house 13 years ago. I bought it thinking I'd rent it out to students and also live in it. Hope was that it would appreciate in value.

13 years later and it's appreciated a lot. I'd have somewhere in the 700k range in my hand, tax free, if I sold it. But that's the extent of any savings/investments I have.

After paying my mortgage and other expenses on my house, then deducting the rents, I pay about $800 out of my own pocket . However about $1150 is paid off the principal. But again that's just building equity and does me little good if I never sell. I'm maxed out on HELOC based on L/V ratio based on my stated income.

It's an appealing thought to sell it. I'm 58, have my own 1 man show renovation/handyman business that earns me decent money, and can work as much/little as I want to. I like working, so long as it's not too much.

I'm tired of landlording. I've done it for 16 years total. Though I'd be OK to buy a condo and just rent it out. That's about the extent of the landlording I'd want to do.

I'd like to live somewhere that I can shut the door and go travel. Not worry about shoveling snow etc.. so condo or townhouse/rowhouse is appealing.

I live in Vancouver BC, Canada. It's hell of expensive here. Which is why I'd end up with so much if I sold.

But what to do then? Condo is 500k and up for 1 bedroom. Townhouse/rowhouse is 600k and up.

I don't really see another city that I'd move to. Maybe next city to Vancouver like Burnaby etc.. I have friends, a business here in Vancouver. Maybe I'd move to Toronto in the future as my adult daughter and grandkids live there. But they move with work, so who knows.

A scenario I came up with is to sell. Net my 700k. Rent a condo in a friends building for 1600 a month. And maybe buy an investment condo in up and coming nearby Squamish. Rent that out to cover the mortgage.

Another scenario; I'm in the renovation business. Though I wouldn't want to get into a BIG headache renovation, like a whole house etc... I do see a couple of nice townhouses in 600k range. They're nice buildings, the kitchen and bath and decor is dated. Pink melamine kitchen cabinets etc... things like that are easy to update and without huge upset and can mostly be done while living in it.

If I did that and a year late sold for decent markup for my efforts, that'd be OK too.

I'm 58 and in reasonable health. Since I bought my house 13 years ago, both my parents have passed away, daughter and grandkids have moved to east coast.

So at times I feel a bit lost, and hanging onto my place for more appreciation just seems like the wrong thing to do.

Appreciation of house has been a great thing. I bought before the 2007/8 bank crash and at that time you could self certify income for self employed people... I'd never qualify for to buy a house under today's criteria. It was almost laughable that the bank gave me a loan for the amount of this house 13 years back.

Any thoughts?
Dottie57
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Re: Sell my house, but where to live then?

Post by Dottie57 »

Quick question. How can you not pay capital gains on appreciation of the house?

As to what to do, I would sell. It doesn’t sound like you enjoy the property.
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Watty
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Re: Sell my house, but where to live then?

Post by Watty »

I don't know how capital gains are taxed in Canada but selling and renting sounds like a real good idea especially if the $700K would be a high percentage of your net worth. That could let you get better diversification in your investments.

You would have to look hard at the numbers but buying a condo just to rent does not sound like a great idea to me especially if you want to travel and will not be in town to handle any issues with the condo.

When you are traveling around you could check out less expensive areas that you might be excited about moving to.
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Re: Sell my house, but where to live then?

Post by 2tall4economy »

Sell it.

I’m somewhat biased as I’ve also been a landlord for over a decade and recently decided to leave it behind, though for somewhat different reasons.

I suspect your work is somewhat limited by your location (ie you have a reputation that drives business to you).

If that’s true, thenIf I was you and I enjoyed renovating (I used to but not anymore), I’d sell, rent a place near your other family and buy a fixer upper and spend your days on that then flip it.

You don’t need to worry about driving business to your door and you don’t need to worry about your family moving away as you can wrap up what you’re working on and sell then move once your lease expired

The risk of course is you buy at the peak of the market and lose money or something similar. I won’t lie and tell you that isn’t a risk. But if you’ve been this close to real estate for your whole life and have made it through a few recessions you should have a good enough sense as to what is valuable and what isn’t.

Good luck! Let us know what you end up doing.
You can do anything you want in life. The rub is that there are consequences.
flaccidsteele
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Re: Sell my house, but where to live then?

Post by flaccidsteele »

Dottie57 wrote: Sun Nov 15, 2020 11:34 pm Quick question. How can you not pay capital gains on appreciation of the house?
No capital gains tax on primary residence in Canada
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
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Re: Sell my house, but where to live then?

Post by geerhardusvos »

burntwood wrote: Sun Nov 15, 2020 11:20 pm
A scenario I came up with is to sell. Net my 700k. Rent a condo in a friends building for 1600 a month. And maybe buy an investment condo in up and coming nearby Squamish. Rent that out to cover the mortgage.

Any thoughts?
I would personally sell in a heartbeat. In fact I did the same thing back in February. I am enjoying the freedom, and I believe you will too. Best wishes!
VTSAX and chill
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by LadyGeek »

burntwood - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. The combined thread is in the Personal Finance (Not Investing) forum (condos).

(Thanks to the member who reported the post. One of the reasons is "Duplicate thread". Also, thanks for providing a link to the original thread.)
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Watty
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by Watty »

birnhamwood wrote: Tue Jul 07, 2020 2:54 pm "I'm not sure exactly what it is I want to do." Why not wait a year or two until you're more certain?
+1

If buying some other property is right for you then there is no reason that you need to do it right now.
burntwood wrote: Tue Jul 07, 2020 11:45 am 2. buy 2 brand new condos in Squamish for 350k each.
Unless the prices have slumped there buying property in a resort area in a pandemic could be risky in case the resort area is hit hard by the pandemic. On option would be to wait to see if real estate in that area is hit hard by the pandemic then try to pick up a deal if prices slump there if this ski season is a bust.

For diversification it might also make sense to just buy one then invest rest of the money in something other than real estate.

Part of the problem with getting good suggestion here is that we don't know anything about the rest of your financial situation. For example we do not know if the home equity is most of your net worth or if you have a lot in other investments. There is a suggested guideline for posting portfolio questions. You don't need to follow it exactly but you might post your information in that format to get better suggestions.

It is great to have posters from all over here but there is also a Canadian sister site to the Bogleheads that you might also ask questions on and you might get better answers about things like Canadian Real estate.

viewtopic.php?f=1&t=6212

https://www.financialwisdomforum.org/forum/

https://www.finiki.org/wiki/Main_Page
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burntwood
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by burntwood »

Thanks Karen
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burntwood
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Re: Sell my house, but where to live then?

Post by burntwood »

geerhardusvos wrote: Sun Nov 15, 2020 11:58 pm
burntwood wrote: Sun Nov 15, 2020 11:20 pm
A scenario I came up with is to sell. Net my 700k. Rent a condo in a friends building for 1600 a month. And maybe buy an investment condo in up and coming nearby Squamish. Rent that out to cover the mortgage.

Any thoughts?
I would personally sell in a heartbeat. In fact I did the same thing back in February. I am enjoying the freedom, and I believe you will too. Best wishes!
That's great to know! Freedom being the word here... that's what I'm looking forward to.
Dottie57
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Re: Sell my house, but where to live then?

Post by Dottie57 »

flaccidsteele wrote: Sun Nov 15, 2020 11:42 pm
Dottie57 wrote: Sun Nov 15, 2020 11:34 pm Quick question. How can you not pay capital gains on appreciation of the house?
No capital gains tax on primary residence in Canada
Gotcha!
nigel_ht
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Re: Sell my house, but where to live then?

Post by nigel_ht »

burntwood wrote: Mon Nov 16, 2020 12:40 pm
geerhardusvos wrote: Sun Nov 15, 2020 11:58 pm
burntwood wrote: Sun Nov 15, 2020 11:20 pm
A scenario I came up with is to sell. Net my 700k. Rent a condo in a friends building for 1600 a month. And maybe buy an investment condo in up and coming nearby Squamish. Rent that out to cover the mortgage.

Any thoughts?
I would personally sell in a heartbeat. In fact I did the same thing back in February. I am enjoying the freedom, and I believe you will too. Best wishes!
That's great to know! Freedom being the word here... that's what I'm looking forward to.
You can do the math but 700K is 36 years worth rent at $1600...and that gives you a lot of options.

I would go the flip route someone suggested. I would be a pain to live in a work in progress but if you pick the right properties you can live near your family and have the luxury of doing something completely different when you sold your flipper.

I wouldn't likely tie myself down on two more condos in an area I was kind of tired of.
Last edited by nigel_ht on Mon Nov 16, 2020 2:28 pm, edited 1 time in total.
tibbitts
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by tibbitts »

You seem to be under the misconception that there is any difference between a house and condo in terms of "shutting the door" and traveling. I own both and they're actually similar. The difference is that with the condo you pay for someone to take care of the property through association dues; with a house you pay someone directly for the same services. You can argue costs being slightly more or less one route or another but either way you end up with the same result.
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burntwood
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Re: Sell my house, buy 2 condos, travel and see what I want to do in my life.

Post by burntwood »

LadyGeek wrote: Mon Nov 16, 2020 8:18 am burntwood - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. The combined thread is in the Personal Finance (Not Investing) forum (condos).

(Thanks to the member who reported the post. One of the reasons is "Duplicate thread". Also, thanks for providing a link to the original thread.)
I see. This recent post got me some really useful answers. Which I wouldn't have got if I hadn't have posted it. Myself I don't see it as being a duplicate thread, and condos? It's a post about a guy wondering what to do with his life and pondering on where money and life intersect. I'm not sure how putting it in 'condos' is helpful.
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