buying a condo to rent out now but move into later

by J.Bell
(bobcaygeon ,on,can)

We are 74 and 76. We own a home fully paid for. We want to buy a condo locally now to move into in the next 5 to 10 years when we can no longer manage the upkeep at the house. We plan to rent it out until that time.

What are the tax problems when we sell our house and move to the condo? Is there any way around the problem?

Do you think our plan is a good idea?

I would like to put a huge downpayment to keep mortgage payments lower (smaller mortgage). Would it be better to put a smaller mortgage and a shorter term (15) yr... Or both?

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Dec 11, 2014
 RE: Buying a condo to rent out now but move into later...
by: Tom

From our understanding you will have some capital gains to deal with (on paper at least - you may not have to pay it) based on the value of the condo when you move into it (if it's gone up). This is best answered by your accountant though because we're not licensed to answer accurately unfortunately.

To answer your downpayment question this is all dependent on your personal goals and situation. As a broad general answer at your ages we would be putting down as much as possible. If we were 25 years younger we would be putting down less as we're currently convinced the central banks will do everything in their power to generate inflation and as a result today's debt will be paid back with cheaper dollars tomorrow (but again, we wouldn't be doing that at your ages). This is obviously only our personal opinions of course!

Thanks so much for the questions,

- Tom

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