Do I sell or keep?

[Christine Ko]

Hi everyone,

I purchased a Jr 1 Bed condo in Leslieville, Toronto right by Dundas and Carlaw back in Jan 2020, thinking it would be my primary residence until I start a family. Then, I started renting it out because I didn’t like living in that unit and also wanted to move to California, so I’m realizing I’m not sure it makes sense from an investment POV since I made the rookie mistake of not seeing it as an investment property first. 

I like the idea of holding at least one property that I can use as an investment vehicle, until such a time as I’d like to move into it myself. Is this something I should consider doing? Here are some numbers to help shed light…

Purchase price: $536,000, Sq ft: 513, average price per sq ft is 1081, and the building is 10 years old

Costs:
Interest payments: $10,164.51 a year
Taxes on net rental income: $1331.21
Property taxes: $2,211.60 a year
Property insurance: $497.52 a year
Maintenance fees: $3653.52 a year

**Total expenses**: $17,858.36
**Total gross rental income**: $1821/month or $21,852.00/year
**Difference: +$3993.64**

I guess in my head all the real estate investing I've read said I should be netting a positive cash flow, and I'm not which is why I'm not sure if I should keep it given I am technically netting out positive despite me having to take cahs out of pocket to continue funding the principle payments

I’m debating if I should sell, keep, or port my mortgage over to into another property that makes more sense from an investment perspective and also one I wouldn’t mind living in later when I am ready to settle down?

Thanks everyone for your advice!

[Nathan Gesner]

Quote from @Christine Ko:

I'm surprised it costs over $500k and only rents for $1,800.

It's not making enough money to justify keeping. Sell it and invest in something better now that you now better.