The Leap of Faith (Homeownership)
Let’s be realistic… The word homeownership can be intimidating when you don’t quite have a firm understanding of its true meaning, or what it consists of.
How can one stay motivated to actually build wealth in real estate and take that leap into homeownership when you’re consistently reading headlines from CBC about Toronto’s bubble of a real estate market. I don’t completely blame the news for trying to make hot titles for their articles as click bait, I mean try to make my blog’s title as captivating as possible so you read it as well!! I can understand why people think that our market is on the verge of collapse as prices have continued to soar for years now… But the reality of the matter is that this surge in pricing only occurs when demand is high and competition is intensified. As long as the demand continues in Toronto, prices will stay continue to rise.
The time to get in, is unfortunately yesterday! If you’re renting right now and have a down payment for a property in your savings account, you’re unfortunately playing the game wrong.
The biggest problem I’m finding first-time buyers are facing with trying to get into the market as it stands… Is when it comes to carrying cost number of ownership compared to renting. Well, lets first determine what carrying costs mean (property tax, mortgage, maintenance fees if a condo, homeowners insurance, utilities). What I’m finding is the buyers looking to put 5% or 10% down on a property, they actually have to pay more monthly on their carrying costs compared to if they were to rent the exact same property at the current market rate right now… This is just the reality of our market.
Let’s make quick sense of why it’s worth spending $200-$300 more on home ownership rather than renting!
Pay into your own investment/against the balance of your mortgage.
Take more pride in your property because it’s actually yours.
Invest in customizing the property as you’ll actually be there for more than a year.
The main reason for purchasing property (pending location/property type) is the appreciation you will see on your property as you use it as your primary residence and pay down your debt.
Although these are all extremely beneficial facotrs….. With this blog I really wanted to dive into another psychological aspect which I’ve become very observant of as I work with first-time homeowners. Taking a chance and venturing into the unknown is a process which builds character and self confidence. Im noticing this is a common theme with taking the plunge into homeownership. I would say that a disproportionately large number of my past clients who were first time homebuyers found themselves a new opportunity in their careers, relationship and opportunities when they mustered up the confidence to venture into the Toronto Real Estate Market. Did you know that in March of 2017 Toronto was the HOTTEST real estate market in the world?? 30 offers on a property on one night?! 100 showings in 2 days?! Do you understand how thick your skin had to be to journey into this type of bull market as a first time home-buyer?!
Several of the first time buyers I worked with at that point came to receive job offers and new opportunities present themselves. There’s something to be said about portraying confidence under the type of pressure such as the hottest real estate market in the world.