ALTERNATIVE WAYS TO GET INTO THE HOUSING MARKET
Get Into The Market
1 in 3 Canadian homebuyers are exploring alternative options to help them get into the market.
If you’ve been busy saving up and evaluating the money it would take for you to buy a house in Canada, you’re likely aware that it is becoming more difficult. First time home buyers are forced to find new and creative ways to enter the housing market.
Renting Out A Portion Of A Primary Residency
Paying off your home each month can be a little easier if your home is also generating extra funds for you. If you’re home has the ability to fit a kitchen, laundry, and a bed comfortably, then this option is right for you. Obviously, you run the risk of having noisy neighbours, but at least you will be making your monthly payments with ease.
Read this CBC article to see how this 31-year-old paid off his mortgage by renting the upstairs of his house.
Pooling Finances With Friends Or Family To Purchase A Home
You can co-own a home as joint tenants (similar to a married couple buying a home together) or tenants-in-common. (Usually, the term tenant describes a person who rents or leases property. For an estate owned by more than one person, however, a tenant is a co-owner.)
With joint tenancy, each person has an interest in the investment, and if one owner dies their share of the home goes to the other owner(s). In a tenants-in-common arrangement, each tenant owns a portion of the property, which becomes part of their estate when they die. Whether registering as joint tenants or tenants-in-common, all owners on the title will need to sign any mortgage, and there can only be one lender, notes Bell.
Living With Like-Minded Neighbours In A Co-Op/Shared Living Arrangement
If the home has a basement that can be converted into an apartment (or already has been), you can rent it out. That rent money you collect can then be used to help pay down the mortgage. Lenders like this idea because it helps to reduce the odds of mortgage default since borrowers are essentially getting financial assistance with their mortgage.
When you apply for a mortgage, you may have to show the lender that you’ve got a potential tenant lined up. Even if you don’t, you may still have to provide your lender with previous lease listings that show the going rental rate for units like yours in the area.
If there is a market to rent out your basement with no trouble, the lender may be more likely to approve your home loan application and you’ll have an easier time making your mortgage payments with the rent checks coming in every month.