All Forum Posts by: Alexandria Garreau

I probably should’ve clarified this in the post so everyone had a bit more backstory. My parents helped me buy this property back in 2021 because they wanted to see me benefit from some of my inheritance money and this is what we agreed on. My dad took charge and set everything up & did not give me the chance to do any of it on my own (now looking back I wish I did all the financial stuff). I brought up numerous times my concern for the rates going up and actually told him I would want to wait to get an investment property because I KNEW what Canada was in for. He locked in at a variable rate anyways, said we would flip then sell it in a year. He forgot it was variable, I thought the whole time it was fixed, 2 years 7 mo later the bank sends me a letter saying that nothing is being paid down and the current mortgage payment isn’t even covering the whole interest. So we had to go in and re adjust it. My term ends  Apr 2026. I honestly at this point want to sell, but also feel defeated if I do. Anyways, I know I’m a rookie and likely look like a newb, but I’m 23. 

I appreciate everyone’s insight & my Bf and I love bigger pockets & it’s inspired us immensely! I’m learning lots from everyone and appreciate the patience.

I should mention that when the mortgage rate increased, so did insurance, and taxes in a lovely timely manner. Insurance and taxes were both $100-200 less when I was cash flowing $900. 

So long story short, my interest rate has increased on my rental property and my mortgage payment went from $1220 a month to $1969. Tenants pay $2350/mo and after the rate increase, this no longer covers mortgage/taxes/insurance. Technically I’m losing $120 a month - which isn’t a lot, but I was cash flowing $900 from it before the increase. Here is where I’m at for next steps:

1. Be open and honest with tenants and tell them that the rent will need to be increased to $2500. 
2. Evict tenants (I would give them a couple months to find a new place) and take the chances with airbnb. It is becoming a bigger thing where I live now. 
3. Either increase or not increase rent then sell it in the spring when the market is a bit more hot here. 
4. keep tenants but tell them I want to sever the house to make it a duplex (would cost nearly $15,000 to do likely) and then airbnb or rent basement. 
5. Any other suggestion that’s out there. 

I’m kind of at a point where I feel impartial to every option. I think #1 is most realistic but I do want to duplex it in the near future. & since I’m on a variable rate, if it goes up any more I don’t really know if I could increase their rent more. 

I appreciate any and all input, thank you!