North York Condo - 2% cash flow only. Any reason to keep it??
Dear BP Gurus,
I am a newbie here. My aunt (single, widow, retired) owns a 2 bed 2 bath condo in North York worth ~$300k CAD. She wants to move to US permanently and is trying to decide if it makes ANY sense to hold on to the condo as a rental after she moves. Due to the unusually high monthly HOA dues and other expenses (taxes, property mgmt, insurance, vacancy allowance, misc repairs reserve etc), she can only expect a net cash flow of $500/mo realistically - which is just 2% on the $300K capital. I have no idea if we can expect any meaningful capital appreciation over the next 5 years - to justify holding it.
What are your thoughts? A couple of other points:
1) The condo is nicely furnished. I was wondering if leasing it as a fully furnished unit can increase the cash flow significantly?
2) If she sells the condo, the equity will mostly be invested in some diversified, (almost) risk-free fixed-income investments yielding ~5% annually.
3) Are there any other options (other than traditional renting or outright selling) that can benefit her more? Like - rent-to-own, or owner-financing etc?
4) How easy is it to either do a FSBO or direct sale to some RE investor (outside MLS?) - to save on selling transaction costs?
Thank you!
- Manny