Your client’s vacant investment property is costing her. But if she sells in the current market, she won’t get what she could have six months ago. Should she hold or cut her losses?
Theepan Balasubramaniam, Realtor, Re/Max, Toronto
First ensure that holding the property won’t hamper her cash flow, says Toronto Re/Max real estate agent Theepan Balasubramaniam. “If she’s financially unable to commit on a monthly basis until it’s leased, then sell.” If she can afford to hold, however, then that’s a better option because most properties will continue to give a good return, even after this hiccup, he says.
In that case, she can lower the rent slightly. Let’s say this property is on the market for $2,100. “I’d suggest drop[ping] it down to $1,950. Tenants have an upper limit and [those] in that price range are probably looking for something under $2,000,” Balasubramaniam says, adding that $1,950 simply looks more appealing on paper. “The owner might lose $150 per month, but if you multiply that by 12, that’s only $1,800. If she keeps it vacant for another month, she’ll lose at least $1,950—or $2,100 at the current rent.”