Renting Vs Selling Your House In Canada: What Should You Do In 2023?
Posted Jul 24th 2023
If you’re ready to move but unsure what to do with your current home, you need to weigh the pros and cons of renting or selling to make the right choice. Selling your current home can help you turn a profit, while renting your home can help you generate positive cash flow and passive income.
Real Estate Agents: Houses for Sale vs. Rental Space
Consulting with a reputable real estate agent near you is a great start because their knowledge of the real estate market will help you make far more informed decisions. Our Durham region real estate agents will advise you with considerations for your long-term goals, after which they will provide you with comprehensive market analyses and reports—including the types of available properties for in-depth comparison. You may find that the next home you want to buy will require you to sell your current property to have the funds for the down payment. This step can help you purchase your dream house for sale. However, if you’d prefer to build your wealth through real estate investment, you may be able to rent your property.
A clear understanding of your financial situation and long-term goals will allow you to make the right decision as we head into the third quarter of 2023. Starting out with a well-defined goal will set you off in the right direction, just in time to have a clear direction for the fourth.
Asking yourself the following questions will also help with your decision:
- Are you ready to be a landlord? Have you considered the implications?
- How much equity has your property generated?
- How much do you still owe on your mortgage?
- How much could you rent out your home or a unit for?
- What type of property are you interested in purchasing next?
These answers will help you decide whether renting or selling your home is the best choice. Below are some considerations as you weigh the options.
The three potential outcomes:
Rent out your house and leverage the equity to buy a “move-up” property.
If there is a high demand for rentals in your neighbourhood, and you own your property, this may be a wise decision. You can use the equity you’ve earned in the home to put towards your new property and keep your current home as an investment property. Make sure you are comfortable with the responsibilities and implications that come with the role of a landlord.
This option will allow you to have two properties generating equity, and you will have a tenant who will help pay down your mortgage on a monthly basis.
Put your house up for sale and use the profits to buy your dream home.
If you sell for a good price, you can invest all of your profits into your dream house. You would be able to make a significant down payment on your next house, without needing to take on additional property management responsibilities that come with being a landlord.
Sell your house to purchase a “move-up” home, then use a portion of the profit to invest in a pre-construction home.
If you want to build long-term wealth and build a solid real estate investment portfolio, this is a wise choice. It may be more valuable to sell your home and buy a “move-up” home that won’t consume your entire budget.
This strategy will allow you to place the remaining profits into a pre-construction home, which is considered a strong investment in the Ontario markets at around 6% in Toronto.
Do you need advice regarding the real estate market? The Baird Team is always ready to help! We will help you navigate the real estate market and will always aim to provide comprehensive, professional insight and guidance. We have access to the houses for sale in your desired area, and our real estate agents will help you buy or sell your home.
Contact us today to get started! Call 905-242-2716.