In desperate need of some unbiased input on multi-unit property
Hi there,
I finally decided to make a profile and join; been lurking in the shadows for too long.
Here is my problem (it's a great problem, but still one I need to make the right decision on):
I bought a five unit five years ago for 630k in an amazing location on a quiet street in the heart of downtown Hallifax, Nova Scotia; pop. ~380,000 people. The area I purchased is landlocked, surrounding by water on all sides and is known as the peninsula. Prices have been increasing at a dangerous rate (40% property tax increase in two years).
I've been getting some input from some senior investors here and they are all telling me to sell - right away. They have packed up from what they feel is an overheated market and taken their money to much larger buildings outside the city center.
At this point, once the dust settles, the NOI is $4881. I owe $469k on the mort but I also have $170k owing on a 3% credit line that I've been using for other things - but this is part of my argument to sell so I must include it here. I took a realtor through and he says I will be able to sell for somewhere in the 1.27-1.3M area. The property really will not cash at all at this rate. But that is what people are willing to pay here right now - crazy but true. There is a huge hype here right now.
Now for me, the property actually does cash. But not much. About $1600/month. In August I can get out of the mort and it will improve things, maybe cash $2250/month.
Things here in Canada are dangerously close to where the US was a few years back. Although we have less sub-prime debt, people are barely able to afford a house here and we're hearing doom and gloom in the news every single day. This was posted today:
http://www.cbc.ca/m/touch/business/story/2012/05/29/rbc-home-affordability.html
So, with all this being said, is there a definite argument to sell here? I very much appreciate any input.
Best Regards,
Nick