It needs ALL flooring, needs all new Windows, could use a new roof, needs to be painted, needs a kitchen remodel and the detached garage is literally about to collapse and needs to be torn down.  

Unless you are very concerned that property values are going to collapse, I'd hang on to this investment.  

Fortunately Canadians are smart enough not to make RICO level mortgage origination fraud legal (unlike your southern neighbors here in the US) so a collapse brought on by mortgage rates resetting on borrowers who had no business getting a mortgage in the first place is very unlikely.On the other hand with mortgage rates below 3% and most Canadian mortgages being short term (compared to a 30 year in the US at least) if rates rose significantly a lot of folks might have a hard time affording the new payment when the loan was due to roll over.

After 16 years, I'd think you have some equity, even after the 2008 collapse - enough where you could sell above the loan amount.  

As somebody who is new to the idea of real estate all I hear about outside of BP is talk of another collapse, yet I don't see it brought up much in conversation.

If this area appreciates 50% in 3-5 years, you will have "stolen" the property; if prices collapse, or the gentrification never comes, you will have overpaid based solely on the value of the property as property.

I did a fix and flip shortly before the housing market collapsed and was lucky to do fairly well with that project.

The sewer line was apparently not built to code in the first place, but the drain line is starting to collapse under the weight of the neighbor's cars (they park mainly in the driveway but also in their yard directly on top of the sewer line).

We got lucky in that we could handle it ourselves, no major root issues or collapsed pipes, just lots of disgusting backup in the tubs and washer drain sink. 

Maybe I am just afraid after seeing millionaires being turned into paupers after the last housing collapse.