Ali posted this question in the comment section of a recent post. She has given permission for me to repost it. There are some very intelligent readers who may want to add their wisdom.
“I live in Vancouver and I’ve been offered $378,000 for my apartment (private sale) by an investor that already owns one suite in my building. I can rent back for $1400 a month in a 5 year lease that I can get out of with a 60 day written notice. I think the market here is most likely going down and I think I should take the deal, but I’m at a loss as to what to do with the $378,000 (i bought 10 years ago and have clear title).”
Additional info: The condo is owned outright. She has first right of refusal in the event that the condo be sold from under her.
Question 1: Is it wise to take this offer? The negotiation process is complete and this is the best deal she was offered.
More from Ali
“I’m super tempted to put all of the money into big Canadian dividend paying companies to generate an average yield of about 5%, that would more than cover my rent by the dividends alone…fingers crossed for capital appreciation. Would that be crazy? I can get 2.2% in a high interest savings account but half of that will go to the government, and I think bonds are a really bad bet right now. Any insight or suggestions would be greatly appreciated.”
Additional info: She would like to buy back into the market at some point if prices normalize. If that does not happen, she is fine renting.
She is in her mid 40s. Obviously not a big fan of bonds. May consider purchasing real estate in the US instead.
Question 2: Given this information, what would you suggest she do with the 378K coming her way?
I’ve given her my advice which I’ll post after we get a few insightful suggestions from our readers.