Hold or sell rental property?

[Jack Mackie]

Hi all,

I'm brand new here so I’ll give you some background on my situation. I live in Vancouver BC, and I’m 34 years old. I work a full time 9-5 job. If your not familiar with certain Canadian real estate markets the greater Vancouver area is a bit bonkers compared to other provinces.. similar to SF or other areas on the west coast.

Two years ago I inherited a home worth roughly 1.2mil. The home has no mortgage and was paid off years ago. I currently have it rented bringing $4500 CAD/mo. Now since taking ownership of the home I’ve reinvested a large amount of the rental income into improvements (new roof, hot water tank, appliances, cosmetic). The home itself is old.. roughly 100 years and what at times seems like never ending repairs and maintenance I’m still turning a good profit at the end of the year with taxes, insurance, maint. Etc. I should mention I totally manage this on my own with my wife and we don’t use any type of property management company.

My wife and I are currently renting an apartment.. and to make the jump into the multi home ownership we purchased a presale condo in February for around $850k. What we're doing is pulling roughly $250k out of the rental house on a refi, using about $100k cash of our own savings for down payment and mortgage the remaining on the new property. The idea is to have the rental SFH income pay for our new condo.. the numbers all line up to essentially pay for everything with a bit of leftover for maintenance costs.

Am I doing this right? I know every market is different but at my age I’m hoping we’re making the correct decisions. For the past few years it made sense to rent because of the lower costs involved but we had to make the jump for a space large enough to start a family. Long term goals are to continue to buy properties possibly.. maybe not in the city itself because of the enormous costs to own but other remote areas in B.C. Although I'm not opposed to something a bit more passive than being a landlord again.

I always knew my return was low comparatively .. not to mention the many hours of stress, physical labour and tenant management that have gone into the home. It’s not ideal and certainly far from passive income. Is the money better off in a different investment? Stock/bonds or mutual funds?

Looking for a bit of insight or advice from the RE investing experts here.