No one could have predicted the global pandemic we are living in today. It has completely shifted the way we conduct our business and live our day to day lives. Now that the initial shock of COVID-19 has worn off, many folks have approached me asking what to do with their investment condo. Is now a good time to sell? What is the future of the housing market?
What you should do with your investment condo depends entirely on your investment goals. Purchasing an investment condo for its appreciation in value may entice you to do something altogether different than someone who purchased an investment condo for cash flow in their retirement years. Therefore, I have broken down some reasons why you should and should not sell your investment condo based on your current situation.
WHY YOU SHOULD SELL YOUR INVESTMENT CONDO IN 2021
Your Investment Time-Frame Is Short
It is likely that we will not be out of the thick of the pandemic and the economic repercussions of the pandemic for a few years to come. If you are planning to retire in the next few years, or you need access to your equity in the short term for any other reason, it might be your best choice to sell your investment condo in 2021.
You Have Been Negatively Impacted By COVID-19
Many people found themselves in surprising financial predicaments in 2020. Some lost their jobs, some had inconsistent work. Rents decreased more than 5% from March 2020 to June 2020 in Toronto to keep up with tenants who were seizing the opportunity to rent bigger spaces for less money as a substantial portion of the population transitioned to working from home. If you or your tenant had suffered financial strain due to the pandemic, it might be worth selling your investment condo this year.
You Were Operating An Airbnb And Are Trying To Rent It Full Time
With tourism coming to a crashing halt, many Toronto Airbnb owners switched gears and offered their investment condos as furnished rentals. However, long-term rentals do not yield the same income the way short-term rentals do. Also, having a fully furnished apartment does not yield as high of an increase in rent as compared to an unfurnished one. Managing a property with a long term tenant is very different than operating an Airbnb. While some short term rental owners have transitioned well during this period, you might be better off selling your investment condo to avoid the trials and tribulations of being a landlord.
WHY YOU SHOULD KEEP YOUR INVESTMENT CONDO IN 2021
You’re Playing The Long Game
It is possible that the current spike we are seeing in prices due to the pandemic could subside. However, as the theory of gravity tells us, what goes down must also come back up. If your retirement is a ways away, time will be on your side with an investment condo.
You Have Not Been Impacted By COVID-19
If you and your tenant have been enjoying steady employment and have encountered no financial strain during the pandemic, 2021 may not be the year you sell your investment condo. As long as the rent you collect offsets the principal of your mortgage, you are building equity.
Real Estate Is An Important Part Of A Balanced Portfolio
Any sage financial advisor will tell you not to place all your eggs in one basket. While stocks and bonds are a great way to invest your money, many of the world’s wealthiest people credit real estate as an important contributor to their riches.
Do you feel like your current scenario does not fit under any of these examples? Not to worry! Reach out to me here and we can sit down and discuss whether or not 2021 is the year you should sell your investment condo.