Selling
Sell, hold or refinance?
Plenty of owners aren’t sure whether now is the time. Here’s how I’d think it through with you. Compare what the property earns today against what the money would earn elsewhere, the tax a sale would trigger, the cost to refinance, and your plans for the next five years.
Seller representation
How deciding to sell, hold or refinance works
A plain explainer if you’re new to this.
- What it is
Three choices for a property you own
You can sell it, keep it as it is, or refinance to pull out equity and keep owning it.
- How each works
Cash, income or both
Selling turns the property into cash and may trigger tax. Holding keeps the income and the risk. Refinancing gives you cash but adds debt.
- Tax
Gains and recapture
A sale can trigger capital gains tax and recaptured depreciation. See CRA’s capital gains guide and talk to your accountant.
- What I check
What it’s worth and what it earns
I give you a realistic value, the income now and after leases renew, and what the building will need, so you can compare the options.
General information, not tax or legal advice. Rules and rates change, and every situation is different. Talk to your lawyer and accountant before you act on anything here.
Why owners sell
Usually one of four things. A problem is forcing a decision, like debt coming due, a building that needs big repairs, or management that has become a burden. A change in life: retirement, an estate, a move, a new plan for the portfolio.
An opportunity somewhere else that needs the money. Or a price they find hard to refuse.
Why owners hold
Also usually one of four. It works: steady rent and easy to look after. The math: selling would trigger a big tax bill or an expensive mortgage penalty.
They’re waiting for better rents or a better market. It’s personal: a family building or the home of their own business.
Questions worth answering
- What would you do with the money, and would it earn more there after tax and costs?
- What will the next five years cost you in repairs, leasing and your own time?
- When does your mortgage renew, and what would it cost to break it?
- Are any big leases ending soon? That affects value either way.
- Does anyone in the family want the property, or want out of it?
Refinancing
If you want cash but like the property, refinancing can free up equity without a sale. Lenders will look at the income and the leases. A mortgage broker or lender can tell you what’s possible.
What I bring
An honest view of what the property would sell for today, who would buy it, and what would change the price. If holding makes more sense, I can tell you that, and stay in touch in case things change.
Questions people ask
How do I know if it’s a good time to sell?
Look at your own situation first: your plans, your debt, the building’s needs and your leases. The market matters too, and I can tell you what similar properties are selling for.
Can you give me a value without listing?
Yes. I can give you an opinion of what it might sell for and who would buy it. A lender may need a formal appraisal as well.
What does refinancing cost?
It depends on your current mortgage, the penalty to break it and the new terms. Ask your lender or a mortgage broker.
What should I gather, ask and watch for?
Documents to gather
- Title and property tax notices
- Leases and operating statements
- Mortgage statement and terms, including prepayment penalties
- Wills, partnership or shareholder agreements, if they apply
Questions to ask
- What is the property worth today, roughly?
- What tax does a sale trigger, and can timing help? (ask your accountant)
- What does it cost to break the mortgage?
- Who has to sign, and do they all agree?
Common mistakes
- Waiting until you have to sell
- Making the decision without tax advice
- Not checking who has authority to sign
- Underpricing to sell fast without testing the market
Typical timeline
- NowValue range and tax advice
- Months 1 to 3Decide and prepare
- Marketing to offerOften 1 to 3 months
- Completion30 to 90 days after conditions
Typical ranges. Your lease, lender and the City set the real dates.
Go deeper
If you’re looking for more details
Questions that help decide
- What would the money earn somewhere else?
- What repairs or leasing costs are coming?
- How much of your time does the building take?
- What are the tax effects of selling now versus later?
- Could a refinance get you what you need without selling?
Selling
Why do owners sell?
Every sale starts with a reason. Knowing yours, and being honest about it, shapes the timing, the buyer and the deal.
- Problem
Something is forcing a decision.
Debt, management, cash flow, rising expenses or the condition of the property.
- Change
Something in the owner’s life has changed.
An estate, a move, a new portfolio strategy or a change in life circumstances.
- Opportunity
Selling opens a door somewhere else.
Another investment, a need for capital, or repositioning what they own.
- Price
The offer is too good to pass up.
An exceptional price, the chance to turn it into cash, or simply “I can’t pass this up.”
The takeaway: owners sell when their circumstances, priorities or opportunities change.
Why owners hold
Why owners hold, or refinance.
The other side of the decision.
- It works
The property does its job.
Steady rent, easy to look after, and a good place for the money.
- The math
Selling would cost too much.
Low equity, a big tax bill on the gain, or a mortgage that is expensive to break.
- Waiting
The owner expects a better time.
Higher values, better rents or a stronger market down the road.
- Personal
It means more than the money.
A family building, estate plans, or the place their own business runs from.
The takeaway: Owners hold when keeping the property makes more sense to them than selling it. If that is you, a refinance or a plan for later may suit you better than a sale today.
Run the numbers
- Cap rate, NOI and valueCap rate is net operating income divided by price.
- Commercial mortgage paymentCommercial lenders usually want a bigger down payment and a shorter amortization than on a home, and they check that the rent covers the payments.
- Lease vs buyOwning usually wins over longer holds if the value grows and you have the down payment.
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Next step
Want a second opinion on sell or hold?
Tell me about the property. I can give you a straight view of your options.