4 Tips For Millennials Who Want To Buy Real Estate
It’s the world we live in now. The rental market and housing market in the main cities like Toronto and Vancouver are tough. It’s expensive to rent and it’s hard to find a way to buy. But what if you did things just a tad bit different? Then and maybe only then will you be able to find the way to buy that Real Estate you’ve always wanted.
Here are some tips for Millennials who are trying to save a down payment to enter the Real Estate Market. (None of them require you to abandon your 3 coffees a day completely, though of course it may be smart to also do so.)
- Pay less rent. Odds are your rent is your biggest expense. Especially if you are in a big city like Vancouver and especially if you choose to live in the heart of downtown. So the average rent for a 1 bedroom downtown ranges from $1500 – $2000. That’s a lot of money, think about it for a second. You probably are paying off someone else’s mortgage, why not yours?! So maybe it’s time to consider lowering your rent. If you can lower it by moving to suburbs then you can really start saving for a downpayment fast. There are places for rent right now in Port Moody for $1200 per month. That could save you up to $9600 a year. It’s only a 25 minute skytrain away from downtown.
- Say goodbye to your car. I get that you may want it all but maybe if you can get rid of some expenses today then you can set your self up for tomorrow. Sure a car is great, it helps you to get around and explore. But if you use the services like Car2Go or ZipCar, Evo and Modo. You won’t be tied down to paying for gas, insurance, and maybe even payments if you are financing one. This again could save you up $500 a month if you own your car and $1000 a month if you are financing one. That’s a good chunk of change. Suffer and live your life on a bike or skytrain around. In this city transportation is so accessible. So why not use it?
- Use Government Programs. The BC Government put into place an option for First-time homebuyers. Those struggling to cobble together a down payment for a home could soon get an interest-free loan. This is tricky but if done right could be smart for those who know that they can save that money to pay this off in the 5 years of free interest. The B.C. HOME Partnership program will meet the buyer’s contribution up to 5% of the home’s purchase price, to a maximum purchase price of $750,000 ($37,500 loan max loan). After five years, buyers can either repay their loan or enter into monthly payments at current interest rates. Loans through the program become due after 25 years – the same length as most mortgages. If you use the first 2 steps to your advantage and get into the market now. Then pay it off in the 5 years down the road. You will make some money as your place will appreciate over the years.
- Make more money. Whether its asking for a raise or taking on a side job, increasing your pay can be an obvious way to find more cash to save. But remember that Millennials are great at hustling and making some money on a side gig. So find that hobby that you love to do and learn to use it to your advantage. Maybe you are an actor and also work a part-time job elsewhere. Why not start doing some background work, especially in you are an UBCP/Actra Union Member. If you are, did you know Background Performers make $25 per hour, with a minimum 8 hour payday ($200 a day). Even if you go to set for only 1 hour. There are other ways to make some good money on the side but should you really want to enter the Real Estate Market then you need to make a way to do so.
It’s not a flawless system but at least it’s a thought to have. There are so many other ways that you can use to your advantage to save for that place to call home.
I hope that this helps you in your endeavour and if so, then great. That’s my goal for you.
Lucas McCann is a REALTOR® with the well known Garbutt + Dumas Real Estate Team. He has the experience needed to work with Buyers & Sellers focusing on Real Estate in Port Moody and the Greater Vancouver area.