Thinking of selling my condo and putting it all in VFV … good idea or not?

Business Forum Personal Finance
1

I’m moving out of my downtown Toronto condo … it’s worth around $600K. I’m torn between two options:

  1. Renting it out for about $2600 a month. It’s in a really good spot close to the subway and University of Toronto. I could manage it myself or have family help out, though I’m not really excited about being a landlord.

  2. Selling it and putting the money into VFV. I’m not great at picking individual stocks, so I’d rather do something more hands-off. But I wonder if it’s riskier to go all-in with stocks instead of holding onto property.

Some context:

  • I don’t need this money for another home for at least 2 years, and even then, I don’t need any of these funds for that future down payment.
  • I don’t need immediate income from this money … I just want a solid return, hopefully above 5% per year over the next 10+ years.
  • My personal tax rate is above 40%.
  • I don’t have any mortgage left on the condo.
  • Monthly condo fees are $550, and property taxes are $2000 a year.
  • I’m in my mid-30s, single, no kids.

Questions:

  1. Which option do you think is better?
  2. If I sell, would it be too risky to put everything into VFV? Any other investments or ETFs I should look into?

Thanks for any advice!

2

I’d sell and invest the money. No way would I want to be a landlord in Ontario with the way tenant laws are right now.

3

I was a landlord for a couple of years, and it was enough for me to never want to do it again. I’d rather have a stock portfolio any day.

But I wouldn’t put all of it in the S&P … better to diversify a bit.

4

First thing is to make sure that $600K estimate is still accurate. The market’s changed a lot, and it might be closer to $500K now.

5

Laken said:
First thing is to make sure that $600K estimate is still accurate. The market’s changed a lot, and it might be closer to $500K now.

Prices are different building to building, even unit to unit. In my building, prices are holding steady, but across the street, they’re dropping.

6

@Ren
Sounds like some wishful thinking, lol.

7

Jules said:
@Ren
Sounds like some wishful thinking, lol.

Haha, sounds like you’re hoping things don’t drop too much! But I get it :joy:

8

Jaime said:

Jules said:
@Ren
Sounds like some wishful thinking, lol.

Haha, sounds like you’re hoping things don’t drop too much! But I get it :joy:

I see we have another Toronto condo owner here :joy:.

9

@Jules
People focus on the areas dropping, like Markham, but ignore places in Toronto that are holding up.

10

@Jules
I’m broke … but HouseSigma can tell you all you need to know :+1:t5:

11

Laken said:
First thing is to make sure that $600K estimate is still accurate. The market’s changed a lot, and it might be closer to $500K now.

And don’t forget capital gains and fees if it’s not your main home.

12

@Stevie
If it’s his main place, there shouldn’t be any capital gains.

13

5% on $600K gets you $30K per year. Renting it out at $2600 a month is about $31K, but you still need to cover taxes and condo fees.

I’d sell … condo prices might be heading down, so sell fast if you do.

14

@Uma
And remember, rental income is taxed at your highest rate.

15

@Uma
Why do you think condo prices will drop?

16

Oran said:
@Uma
Why do you think condo prices will drop?

Prices are already dropping a lot. Condos in my area are down 15-20% from the peak in 2022.

https://toronto.listing.ca/condo-price-history.htm

17

Oran said:
@Uma
Why do you think condo prices will drop?

Inventory is growing fast, but sales aren’t keeping up.

18

Oran said:
@Uma
Why do you think condo prices will drop?

Lots of people will be struggling with renewals next year when their low-rate mortgages expire and the job market is tough.
P.S. Please upvote … need more karma to post. Thanks :pray:

19

Oran said:
@Uma
Why do you think condo prices will drop?

Way too many condos, especially ones that aren’t really meeting people’s needs.

20

Oran said:
@Uma
Why do you think condo prices will drop?

I doubt prices will fall. As rates drop, prices will stabilize or even rise. If they do dip, rates will probably go down further to help.