Renting my condo
December 5, 2013 9:53 AM Subscribe
I have owned a condo apartment for five years. I do not have a mortgage. My parents gave me the money to pay for it cash, and I pay them back at a rate $800 a month, no interest. The condo was not a gift as I'm fully expected to repay my parents. I suppose the "gift" was a loan with no interest. I want to move out and rent my place out. More details inside.
posted by ohmy to Work & Money (18 answers total)
My partner and I would like to purchase a place together, and since other condos the same size in my building have been renting out for almost double what I pay my parents per month, we figured that it would be smart to rent my place out and live at his house for about a year so we can combine our household expenses and save up to buy a house/duplex together. At first, I thought my contribution to our savings would be the hefty profit I'd be making from renting my place out.
... except, my father mentioned in passing that since my condo is paid off in the eyes of the bank, I might end up being taxed on the entire rental income, minus expenses. A friend of mine who has a condo as well, but also has a mortgage, said that she deducts her mortgage (or the interest of her mortgage?) as an expense.
I don't know, I am very confused. I know nothing about this, and I'm not even sure what to search for on Google that might lead me to the proper information. Am I at a disadvantage from a tax standpoint if I rent out my apartment? What part of the rental income is taxable? Is renting out my place even the best idea in this situation? Are there any resources that can help me figure out exactly how much money I'm going to have at the end of every month?
I strongly prefer not to sell my condo as it doesn't cost me very much to keep, it's been going up in value steadily in the past 5 years, and it's in a very desirable location. But... if it really doesn't make sense to keep it, I am - reluctantly - willing to let it go.
Looking for some direction in this situation!
BTW, I live in Canada.