Is it the right time to sell my property?
More often than not our clients come to us wanting to sell a property. Any “salesperson” would love to just say “yes!” and convert that sale into a juicy commission. But for us, our priority is being engaged in protecting the best interests of our clients, before anything else! Sometimes selling is actually not the best idea or the right timing after all.
So, let’s dive into it and see what your options are:
- Ask for a Comparative Market Analysis (CMA) that provides you with an idea of the market value of your property, not just a general idea of price.
- Ask for explanations about how the sale process will unfold and how your day- to-day life will be affected.
- Make sure a timeline is provided so you know what to expect.
- Ask for information about the fees involved and what those fees include or not.
- Make sure to talk to your mortgage broker in order to confirm how much equity your property has generated since you bought it, to the eyes of the bank; how this equity can be used for the new purchase and how your monthly payments (cashflow) will be affected.
- Make sure to confirm with your Realtor how much rent you can get for your current home so you can run your numbers accordingly.
- Talk to your accountant to confirm how your income tax will be affected based on the new income and the fact that, when you decide to sell this property in the future, there will be a capital gain tax due on it after the date it’s not your principal residence any more.
3. Use the equity or a High Equity Line of Credit attached to your mortgage (if you have access to one) to make any changes/extensions that are possible to your current home:
- Updating bathrooms/kitchen or any other interior areas that are worth renovating.
- Improving critical systems in the property such as heating and cooling equipment or address structural issues in roofs or walls, or even waterproofing the basement.
- If you have a basement with a separate entrance or walk-out, that you’re currently using as part of your home, look into the possibility of converting it into a rental unit for either long-term or short-term. Make sure to obtain proper advice on short-term rentals as rules for them in Toronto are still not completely defined and pending the results of a hearing scheduled for August 26th, 2019. Find more information in this link.
- As of August 2018, the city of Toronto has allowed the construction of laneway suites in Toronto subject to some criteria. If your property fits the profile, you might want to consider building a laneway home and convert it into an income generating property or use it to host a family member. For more information and updates about laneway housing regulation, please visit this link.
* 1. Some examples include: 1. 529-600 Fleet St (Sold in 2012 for $189,500 and sold in 2018 for $355,000); 2. 509 – 705 King St W (Sold in 2012 for $200,500 and sold in 2018 for $389,000); 3. 306 – 319 Carlaw Ave (Sold in 2012 for $265,000 and sold in 2018 for $502,000); 4. 706 – 319 Carlaw Ave (Sold in 2012 for $271,500 and sold in 2019 for $521,000). Some of these included minor renovations, others, no renovations at all.
* 2 Attention! This is catered to people who have considered Real Estate as an investment option. We understand some might have a better use of their money in other investment vehicles or might even find some important tax breaks in not owning real estate, but since not everyone has access to other levels and opportunities of investment, we want to make sure you have the right information at hand if you’ve ever considered real estate as an option.