SUPPOSE you have
had your home on the
market for three
months and it just
won’t sell.

Burt you have'to move
because you have already
boughi another piace, It so
happens that you have the
financial resources to carry
the two properties —- so
what do you do?

Well basically you have
two choices. One, you can
start lowering the price of
the home until it sells. Or
you can rent it out and
attempt to sell it at a later
time when the market might
be better.

Actually there are other
choices, ii is just that they
aren‘t really rational ones.
For example you can leave
the house empty and contin-
ue to try and sell it without
lowering the price enough.
Besides the fact that it is dif-
ficult to sell a house with no
furniture in it, this course of
action makes no sense from a
financial point of view as you
have a huge investment just
sitting there generating
expenses but no income.

_ Another choice would be
to rent while you continue
to try and sell the home.
There are two problems with
this strategy. One, it is very
difficult to rent a house’ with
a “For Sale” sign on the
lawn because porential
renters know that they could
be curfed out at any time if
the: home is sold. Second!y,
as we will discuss in more
detail below, it is not easy to
sell a house with tenants in
it. So we'll reject these
_'$trategies out of hand, even
. though some people do
attempt them. |

: Back to our original two
choices — do we sell or
rent?. Well, every situation is
unique but there are certain
typical revenues and costs

that we can Jook at to get an
idea of the economics of sell-
ing versus renting. The
accompanying table presents
estimates of such revenues
and costs for the five hous-
ing categories on the North
Shore.

The first column in the
table shows the value of a
sample home in cach of the
categorics. The next column,
under the heading “Sell,”
shows the monthly return
that you would get if you
sold the home and invested
all the proceeds in a GIC
paying 5.5% a year.

The next five columns
under “Rent” show the fig-
ures associated with renting
the home, including the
e cnthly rent, property taxes,

tenance, property man-

«nent fees and the result-
ing monthly net renzal
income. The last three
columns show the difference
in the money you would |
receive between the selling
and renting options. The dif
ference is shown monthly
and annually, with the latter
figure also expressed as a
percentage of the value of
the home.

These figures would sug-
gest that you will have more
money in your pocket at the
end of the year if you sel!
your home as opposed to
renting it out. Therefore, in
general, selling appears to be
the better option, at least on
a cash flow basis.

But of course this is not
the end of the story. The

reason you might want to
rent is that you anticipate
that home prices will
increase and vou expect to
get more money if you wait
and self your home fater on.
In fact, you might conclude
thar if home prices appreci-
ate over the next year by
more than the percentage
amouat in the last column,
then you will be betrer off to
rent and then sell at the
higher price.

However there are two
reasons why such a conclu-
sion is not valid. The first is
that your home will likely
depreciate in value during
the rental period. While
most renters are responsible
people who take reasonably
good care of the home they
are renting, they just don’
have the incentive to care for
the home as well as an oceu-
pying owner does.

Furthermore there is
alwavs the risk that you will
get a renter who really lets
the home get run down or
who damages it significantly.

The second problem with
the rent-and-then-sell strate-
gy is that it is much more
difficult to sell a home with
tenants in it. With a rented
home, open houses are diffi-
cult, if not impossible, to
arrange, tenants have to be
given 24 hours notice before
a showing and the tenants
have no incentive to have the
hoate at its best for a shaw-
ing. In fact they have a disin-
centive as they will probably
have to leave if the hame is
sold.

It is almost a certainty
thar these factors will com-
bine to adversely affece the
amount of money you will
get for your home. How
much will the impact be? It
is very difficult to say but it
is certainly not fanciful to .
speculate that it could THE North Shore enj

See Risky page 72

Al A GLANCE

eonverescaces oneee

ADDRESS: 4117 Burkeridge Place

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LOT Siz

@acoaucares

INTERICR SIZE: 3400 SQ. FT.

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NUMBER GF BEDROOMS: 5

vee Co venenaesraaragencosorers

NUMBER OF FLOORS: 3

ASKING PAICE: $579,000

OPEN HOUSE: Stinday 2 - 4pm

LISTING AGENT: Malcolm Hasman —
$21-1188 or 280-1679

eveuewsestocersese eomeccens

ecenavos

SPECIAL FEATURES: Very bright & sunny
property.

Friday, November 5, 1999 — North Shore News - 55

joyed some sunny Halioween weekend weather, and s%-year- o

cld Kaylone Jehnson took advantage of it to play in the lseves in North .
Vancouver's Vicioria Park. : 2 7

inngy
4117 Burkeridge Piace

Magnificent “Bayridge”
Family Home !

Exceptional Value! This spacious 5 bedroom
home sits on a wonderful creekside property
on @ quiet child-safe cul-de-sac. Beautifully
updated with self-
contained nanny or inlaw

suite. Large family room,

office and exercise room

and huge wrap-a-round

sundecks. Located only a

short walk to elementary

school and the beach!

This is a great buy for a

very appealing and

attractive home in this

most ~
Maicolm Hasman

desirable
location. Angoll Hasman & Associates