Author Topic: To sell/keep or develop?  (Read 1133 times)

pudding

  • Bristles
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  • Posts: 357
To sell/keep or develop?
« on: April 05, 2016, 08:05:22 PM »
Hi everyone

I have a bit of a dilema and seeking the opinions of experienced investors on here.

I have a house in Vancouver Canada, I've owned it for 9 years.

I owe 730k on it and had it appraised last month at 1.275 million have 5 year term on mortgage at 2.8%

I have permission to build a small 650 square foot house out the back (its a 33x110 foot lot) I can build it for 120k to 150k will add around 250k to property value and rent for 1700 and im only obliged to pay the interest at prime plus 1/2 percent. Will take about 9 months and a lot of work on my part.

Without the extra house out back I can cover the bills and mortgage, with the house I can probably have $1000 in hand.


Now the house has kind of run my life for 9 years.... I got into it naively and bit off a huge mortgage. I rented it out as 3 suites when its only a single family home and recently got busted by the city.

Now I have to do this and that to please them and can have a legal suite in the basement + 5 or 6 bedroom on other 2 floors and if i want build the small house. upgrades to keep city happy cost around 25k and a huge headache

OR!

I can sell it in this crazy real estate market we have here for around 1.5million, pay the bank their 730k and pocket 770k!




I'm not sure how to handle it.

I'm not someone that needs loads of luxury, I prefer to be in a nice area down by the beach and ride my bike and travel a bit in winter.

If I sold it and had that amount of money on hand, I could easily just save it for now. I have a renovation business and can make enough to live off from that.

Part of me thinks "ok, if I keep it it may go up some more, one day may be able to split the small house off from the main house and sell separately, maybe once the city have gone then all the BIG problems are over and I can just rent things and finally relax"

The other thinks " maybe you build the small house and the market dips, done all that work for the same as can sell for now, if sell now have enough for a good life, for the rest of my life! MMM style perhaps?"

Some factors are;

After 9 years with that house Im kinda burned out with it

It may be that the majority of the problems actually have been ironed out now

I dont 'have' to build a small house, just seems like a good option, but then again??

My adult daughter lives there and might move to the east coast if I decide to sell, and that would suck! I'd miss her sooo much. Though I do have a plan B to offer her different accommodation in town.

If I sell and then have a lump of cash, sounds like I'd have to invest it and then I think "isnt the house a good investment already, build the small house and it is"    and I go round in circles a bit and think maybe what I should really do is go on a holiday and think about it...  but it could be a bubble in which case timing is crucial, but then again it might go up another 200k hard to say. City assessment says it went up 225k in one year!

But it dives me nuts, its on my mind all the time.

The irony is that when I got into it 9 years back I thought the rents would pay for my travelling, boy was I wrong! It became an albertros around my neck.

perigee

  • 5 O'Clock Shadow
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  • Posts: 14
  • Location: The Pacific Northwest
Re: To sell/keep or develop?
« Reply #1 on: April 10, 2016, 09:01:40 AM »
I am in a slightly similar situation, but my cash out would only net $200k which is why I am hesitating.  If you can net in excess of $500k I would cash out. 

As you have discovered YVR can be a nightmare to deal with and if you think you have cleared all the hurtles get ready for a surprise or two especially if trying to build.

No one can time the market and it is better to sell while it's hot then when it is cooling.