I have a legit question

Grayson Cook
Grayson Cook

I've been lurking on Jow Forums for almost 2 years now, and I've seen a lot of talk about real estate from many of you that makes me think some of you actual do what you suggest others do (own properties, rent out, etc).

I'd like to think i'm pretty financially literate but I'll be honest that neither my dad nor I know much about real estate, even though he and my grandmother own a fair bit of it. I graduate university soon and my grandmother is giving me an appartment that she used to use in a big canadian city.
It is a really nice property, and I was able to find an identical appartment just 1 floor above it going for just under 1.2 million CAD (a little under a mil USD). The fees are around 16000 per year (like 1350 a month approx) and while the building itself is very nice (Great location downtown, pools, guarded, 3 parking spots, racketballl courts etc.. I really don't feel it would be good for me to just suddenly have this handed to me str8 out of school, plus to have to fork over about 20000 a year to live there is excessive.
The market in this city is still good, and actually I believe it has a positive outlook (vancouver and toronto are taking a shit).

What should I do?

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Jace Russell
Jace Russell

Does the building allow renters? If you are allowed to rent it out find tenants yourself or hire a realtor/management company to find a tenant.

Adam Gray
Adam Gray

The building does not allow AirBnb, but I don't actually know if renting out is allowed.
it's a good question.

Isaiah Jenkins
Isaiah Jenkins

Is it within half an hour to an hour to UBC/UoT-Ryerson? Rent it room by room to foreign students, guaranteed money and no headache about them staying forever

Joshua Allen
Joshua Allen

Give it to me free of charge. How do you want to handle the exchange?

Daniel Sanchez
Daniel Sanchez

It is a 10 minute walk from McGill and about 15 minutes to Concordia University.
it's in Montreal btw.

Isaiah Rogers
Isaiah Rogers

What would you be paying for rent normally in this city? 1350 per month isn't bad and if the apartment has multiple rooms you could even get a roommate to help pay your fees (maybe even all of your fees depending on local rents).

Brandon Peterson
Brandon Peterson

Would selling it and purchasing two appartments in a more down to earth building and renting out 1 place work?

Alexander Reed
Alexander Reed

remember that the best time to sell is while the market is still good

Gavin Ward
Gavin Ward

that's the thing rent in Montreal is really fucking inexpensive, and prices aren't prohibitive for purchasing like in Toronto/Vancouver so people can actually swing the nice places with a mortgage.

So imo with the appartment the way it is... A l'ancienne.. it would be tough to find a young professional who isn't looking to buy.
plus if I wanted to live there the kitchen needs to be redone etc...

Nolan Rogers
Nolan Rogers

I think you're right, but the market in Montreal isn't in a bubble like in toronto and vancouver. you can still find places for like 400 grand that in those cities would cost 1 mil +

That's stats canada btw ^

Ryan Ross
Ryan Ross

It could work but you will be losing money paying realtor fees for the sale and then paying more fees for the purchase of the second properties. It may be better to refinance the property you do have to purchase the other properties. The issue with that is three mortgages but you still "own" all three properties and can rent them out to pay the mortgages.

Levi Diaz
Levi Diaz

Okay so here's where my lack of real estate understanding kicks in:
In lamens, do you mean get a loan backed by the appartment I own to purchase other appartments?

Hunter Baker
Hunter Baker

You've struck gold f am. You'll need to get a copy of condo bylaws but I'm 99% sure they can't prevent you front renting it out unless its some specialized old folks home.

I'd say its not worth selling and buying two apartments for two reasons - you know the history of this building and quality of the place, while the new ones are cats in the bags. Also fees on transactions, feeding real estate parasites and lawyers + capital gains you might have to pay (depends at what basis your grandma gifted the place to you).

Forget that noise, and rent each room to a foreign student Thats a tenant who definitely has <some> money since tuition for foreign students is 2.5x the normal amount + usually foreign students are higher quality people (upbringing and education wise) than some shmucks from the street. After they move out in one to four years you can adjust rent to new market rate again.

Thomas Collins
Thomas Collins

Yes you refinance the property you are being given. You could potentially use that money to purchase another property outright and then only have a mortgage on the first property. You then rent that out to pay the mortgage and now you are living in a home you paid for in full.

This way you dont pay all the fees in buying/selling and the rent you charge can offset the interest of the finance loan.

Aiden Ross
Aiden Ross

What insulates this city from a collapse in those other ones? I don't think you will KYS yourself if it gets hit because you can always be comfy with somewhere nice to live, but if it is about making money then there has to be a better way

Jaxon Bennett
Jaxon Bennett

Okay this makes sense to me.
I can still 'play' the market in Montreal by holding onto real estate, but pay for the nut (and maybe pay for half my rent at another place??) on it with a tenant. Problem here is like I said the kitchen 100% needs to get redone a bit, and one of the rooms was converted into a kind of library/lounge situation.
2 bathrooms though with two showers.

So all in all if I don't sell and intend to rent out I would be looking at renovating the kitchen, and a significant reworking of the library to turn it into a room.
This is if I want to maximize the rental profit by having two tenants (not to mention make the search for a tenant a lot less difficult I bet.

Contingency: what if the building doesn't permit renting it out?

James Allen
James Allen

So in 1995 my dad bought a fuckton of places in Montreal after the referendum in which a majority of the province voted to exit Canada and become a sovereign country.
This didn't occur, and a few months ago the provincial elections saw the seperatist party get absolutely decimated to new lows (like they are irrelevant now).

So Political Stability imo combined with the fact that Quebec DOES NOT have any laws or regualtions on foreign purchasers of real estate means we are in a good position to see foreign money come in, plus other canadians getting JUSTED because of the bubble's in Van/To.

Austin Stewart
Austin Stewart

Rent it room by room to foreign students, guaranteed money and no headache about them staying forever

Foreign students, in Canada? You'll need to fumigate your property every year because it's going to smell of any or all of he following:

Weed
Kimchi
Cigarettes
Grease/Sweat
Spices
Coconuts
Burnt oil

Guess which groups of people I am refering to here.

Leo Martinez
Leo Martinez

Okay that's a pretty solid idea.
I get to live in my grandmothers appartment right?

Ian Ross
Ian Ross

I don't consider myself any more racist than the average quebecer but you are 100% fucking right .

Jonathan Hill
Jonathan Hill

It is up to you. You can live in the apartment if you want or one of the properties you bought with the refinance money. You got really lucky in having 100% equity in a property worth 1mil

Benjamin Hall
Benjamin Hall

I just have no clue what to do in R/E and it almost feels like a waste because I know a lot of people that could maximize potential profit from a situation like this and I have no idea how to navigate R/E

Dominic Turner
Dominic Turner

Renovation is an upfront cost, if you talk to an accountant you might be able to write off some of that on taxes. But basically yeah there will be no way around it.

Two bedrooms and two separate washrooms will be ideal, especially if you're renting to ladies since they usually prefer separate washrooms. Posting it on craigslist/kijiji with a strong emphasis on the short walk to unis will bait the foreign students.

Contingency: what if the building doesn't permit renting it out?
The first step is emailing/swinging by the property manager and asking for the condo bylaws, that will tell you whether renting is fine. In 99% of the cases, it should be fine. If you can't rent it out and don't want to bother with the property fees, sell it, buy a cheaper, smaller place for youself and roll the gains into TFSA/ investment accounts. TFSA in general should be used for higher (but not idiotic) risk plays, while the taxable investment account can hold dividend stocks (BMO, TD, TransCanada, lots more choices on US side than on ours) since dividend taxes are low as fuck (check it out on simpletax.ca/calculator)

Christopher Gomez
Christopher Gomez

I don't understand, how could refinancing an already paid for home he was given suddenly create enough money to buy another home? And how does one refinance a home that has no loan?

Noah Peterson
Noah Peterson

Bait but I'll bite. At the end of the day, you will have to perform at least light renovation of the property in five to ten years (paint/budget for appliances breaking/etc..). I'd rather have people with money tied to a school instead of some retards off the streets. Young professionals are also an option but when a young professional loses the job, they don't have the bank of mom and dad to bail them out and cover rent. And in Canada that might mean four-five months of legally unpaid rent if that happens in winter. Also you're an imbecile and belong on /pol.

Jose Gray
Jose Gray

The appartment was purchased in 1982 for 370,000 dollars and Capital gains here for me would be about 50% of 50%, so 25% of the gains.
That is several hundred thousand dollars...
I'm starting to realize selling it is less and less an attractive option.

Ayden Jenkins
Ayden Jenkins

If I didn't want to do all that landlord shit and deal with the hassle are there services that will do it for me, for a cut?
how costly is that?

Logan Mitchell
Logan Mitchell

It is called a cash-out refinance. You are just getting a mortgage on a property that is paid for and the amount of the mortgage (less fees) is given to you in cash. So OP could take out a $500k mortgage on the apartment, use that to buy a more modest property and then rent one of the properties to help with the payments on the $500k mortgage.

Julian Perez
Julian Perez

How retarded would I be to sell it, invest it, and rent appartments with the income from the investments?

Julian Kelly
Julian Kelly

These services exist but I actually don't know how much they charge. I imagine they make sense at scale, when you have say five places, than when you have a single place otherwise they'll eat into what you make.

The most probable scenario is that after listing, the place, showing it to prospective tenants and signing the lease (use the standard recommended one for your province, for Ontario there is one online) you might receive one call per year tops.

I gotta run but do create a thread on the weekend/later to update on what course of action you've decided on

Brayden Thomas
Brayden Thomas

If you think you might want to move in the next 5 years, renting will give you more flexibility. Selling a property is expensive. If you know where you want to be for at least the next five years, buying a property there is probably not a bad idea. You're insulated from rent increases and you might get some decent price appreciation if you're in a good market. You could always sell the condo, buy a cheaper one to live in, and invest the rest for income.

Christian Garcia
Christian Garcia

Thank you again for your help I'm saving this thread for later review
And I really doubt I'll be able to come up with a plan come the weekend, I do have a bit of time after all.
Thanks again man

Bentley Adams
Bentley Adams

After reading this thread I have come to the conclusion that OP's problem isn't his lack of real estate knowledge, it's that he's a garden variety brainlet that doesn't know what he wants.

Do whatever option is easiest OP. I recommend against risk-taking for you. You have been handed easy-mode, don't fuck it up.

Isaiah Carter
Isaiah Carter

haha I think you nailed my sentiment on this.
Normally I make pretty good decisions on stuff like this but normally i'm not moving a million bucks around and that for me is a pretty big placement.
Cheers
-GV brainlet

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