It's like if I go to all this trouble of building a laneway house and authorising my basement suite ( which I have to!) I would have a 3 addresses at one property, expenses of around 4500 a month and potential rents of 5900 when all rented so say an average 5400 to allow for empty unit. so 1000 before tax. maybe 800 after. Thats if I dont live there and its all rented.
House is holding $750k in equity and making $1000/mo profit and requires constant work and headache...
The opportunity cost of $750k is much higher than $1000 per month in other forms of investment. Even if the house ran itself and required no headache I would still sell and use the equity to invest in a diverse index fund which would require zero effort and on average over time give greater returns.
Hi comfyfutons, thanks for your input!
Might sound a bit odd, but honestly until last week I had no idea that things such as index funds existed.
I've watched some youtube videos explaining what they are, and I'll educate myself a lot more.
Something like that would be perfect for me as I like to travel and the responsibility of that house over the years! I think it'll be a huge weight off my shoulders. Also if grandkids end up back on east coast, with no house to hold me down and dividends from index funds I'd much more mobile that Ive been last 9 hears with house/ albatross hanging around my neck.
There are some other things in the house equation though.
One is the mortgage is paid down around 1050 a month.
Another is that I have a renovation business and I have a good size secure workshop and storage. Would cost about 400 to rent similar
One other is my daughter and grandkids are living there at the moment and thats good to know! If I sold it and they moved all the way back to Toronto I'd miss then terribly, I think I'd rather have them here than have the money form the house to be honest.
Of course the other is any appreciation. It's good old appreciation thats what has got me to this great equity position. Even if it averaged a 2% a year increase, on 1.5 million its 30,000 a year. Or 2500 a month , forecasts say a 9% increase in 2016 in the area its in.
If looked at that way sounds different. Maybe make average 500 after bills paid from rents. If added up its $4450 a month and a secure and reasonably priced place for my daughter to live.
Sorry I know I'm sort of contradicting myself a bit here, but I think thats why I'm sort of on the fence and thinking its kind of like I dont really have all the information I need yet to make a decision yet.
It's almost like I need to get the city permits and upgrades done and then go on a trip for a week, come back and look at it with a fresh start and see if it works from there. And then look at the variables and weigh things up and make a decision. At the moment I'm kind of on the ropes and feeling stressed.
And the city and their red tape permit BS that goes way beyond being reasonable... drives me nuts. Thankfully I have a couple cold beers in the fridge.