The rising costs of everything have many people rightly concerned. From grocery stores and gas stations to professional services and entertainment, the price of everything seems to be soaring with no end in sight. Nowhere is the impact of this inflation felt more acutely than in the real estate market, where the ability to buy a house seems more and more like something only the rich can afford.
For recent graduates and young people in university, the prospect can range from discouraging to frightening. Is there a solution? Though prices aren’t likely to drop substantially, you may have access to resources that you haven’t yet considered. In this post, we’ll examine some of the best ways a young person can go from a broke student to a proud homeowner in as little time as possible.
Did you know that we have an entire course just for first time home buyers? You can get it for free today right here.
Your First Step on the Property Ladder
The property ladder is a real estate term that indicates how many houses or condos an individual owns a stake in. First-time buyers purchasing their primary residence have taken their first step. Savvy investors who own multiple income properties and manage large portfolios sit at the top of the ladder.
Homeowners who have owned for many years and have built substantial equity fall somewhere in the middle. Those still renting, including many college and university students, have yet to get a foothold. Getting onto the first rung of the ladder may be more challenging now than in the past, but the rewards of homeownership are substantial.
- For the first time, you have a place that is truly yours, where you no longer have to worry about being asked to leave if the owner wants the home for themselves.
- Owning a home provides an incredible sense of pride and accomplishment.
- Real estate is an excellent long-term investment that allows you to grow your equity and purchasing power as property values rise. As you build your net worth, you may even decide to add another property to your name and move up the next step on the ladder!
The only question is, how do you succeed in a market that feels as though it’s plotting against you? Let’s take a look at a few creative solutions that can help you achieve your goal against what seems like insurmountable odds.
Buying your first house can be both intimidating and exciting! Here are some resources to help you look forward to your adventure:
- Best West Ontario Cities for First-Time Buyers
- The Ultimate Guide for First-Time Buyers in Guelph
- Real Estate 101 for First-Time Buyers
Begin as Young as Possible
Buying real estate may be the furthest thing from your mind when you are young, but saving now can make all the difference in the world later. As soon as it becomes feasible, consider opening an investment account to begin saving for your first home.
Parents of young children might even open a TFSA on their behalf for this express purpose. Setting aside a few dollars a month while children are young can give them a significant head start when they begin their first house hunt.
Remember that the down payment is often the biggest challenge when purchasing your first house. With the power of compound interest over time, every dollar saved today will help make your dream of homeownership a reality later.
Real estate investing isn’t just for the wealthy! It can be an excellent path for first-time buyers. Here are some resources that can help:
- How to Generate Passive Income From Your Primary Residence
- Growing Your Wealth Through Real Estate Even in a Recession
- A Complete Guide to Real Estate Investing in Guelph
Buy as a Team
Saving for a down payment, qualifying for financing, and keeping up with monthly payments can all be too much for one person. It can be even more difficult to manage if you have student debt and a sparse credit history. But what if you didn’t do it alone?
In the face of high housing costs and rising interest rates, many people are finding success by buying as a team. It may sound outrageous, but is it any more so than living with roommates to make renting more affordable? Buying as a team instead of renting will require more commitment, and each party must be clear on their expectations and responsibilities.
However, if you can make it work, each of you will enjoy the benefits and financial security of owning a house. Later on, you can sell the property to go your separate ways if you prefer. With the equity you have built, you will have greater financial resources to pursue whatever your next steps may be.
Expand Your Thinking
When buying their first house with limited funds, many people think small. Searching for the smallest condo in a neighbourhood far from the city centre and all the conveniences that go along with it can mean getting a more affordable price. However, this is not your only option as a first-time buyer.
If you want to expand the possibilities, try thinking like an investor. Buying a property with income potential may cost more upfront, but it can also mean access to greater financing. For example, imagine you buy a house that has a secondary suite in the basement. Renting out one unit will go a long way towards covering your monthly costs.
If you take the basement apartment and rent out the larger unit, you might even end up with positive cash flow, all while owning a larger property that offers greater equity growth over time.
Buying an older property can be a great way to save money on your first purchase. If this is a path you’re considering, be sure to read “Buying an Older Home? Here Are The Red Flags To Watch Out For.”
Guelph, a City of Possibilities
Buying property in Guelph can open many doors you may not even realize existed. As a university town, many older homes have been renovated and sectioned off into student housing. Typically, real estate investors buy these homes to rent out to students and generate passive income.
You may picture these investors as older, wealthy individuals who have the advantage of years of equity behind them. And many of them are, but that demographic is slowly changing. Younger buyers are realizing the value of owning real estate early and are finding all sorts of creative ways to break into the market.
Even with the soaring prices of housing, there are resources available to you. Earlier, we suggested that team buying may be an option. However, another alternative is to buy the property yourself while you are still a student. You can live in one room as you attend class and rent out the rest of the house to your peers. The benefits of doing so are endless.
- Student residence is one of the most prohibitive costs of secondary education. By owning, you live rent-free, as your monthly income covers all or most of your housing costs. You may even have funds left over each month.
- You won’t have to worry about dealing with the landlord or facing a possible eviction. Owning a home gives you a sense of security you never have as a tenant.
- Your net worth grows each year as your home rises in value. When you graduate, you’ll have less debt, greater assets, and more financial stability.
An Investment In Your Financial Future
Getting into the real estate market as early as possible, in any way possible, is an excellent investment in your future, both emotionally and financially. Few things in life are as satisfying as having a place to call your own.
And as the value of your home increases, a world of possibilities opens up to you. You can take over the main suite, renovate your home entirely to suit your changing lifestyle, or cash out and buy a new house altogether. When you have equity, you have options!
Helping first-time home buyers achieve their goals is one of our specialties. Reach out today at 519.826.7109 or info@gowylde.ca with any questions or to get started.
