Investing in Real Estate - For the first-time home buyer
As a first-time home buyer, owning an investment property may be your last thought when it comes to purchasing a home. Many millennials and first-time home buyers think investing is just for people who already have homes and extra money to spend. However, purchasing a rental property might just make the most financial sense for the first-time home buyer. Purchasing a duplex or triplex might be the solution to building your equity as a millennial. You can live in one unit and rent out the other unit(s) to help cover your mortgage, utilities and taxes. As you save money each month, you can build equity to eventually own a property of your own in addition to your rental property. Living in your first home with other tenants may be unappealing at first, but the ends justify the means. In many instances and especially in Sudbury, having just one rental unit can cover almost or all of your monthly mortgage payments. The Canada Mortgage and Housing Corporation predicts in their Forecast Summary that the average rental price in 2018 in Sudbury will be $1,015 and the average home price will be $252,600 - $267,400. This means the average rental price can cover the average monthly mortgage payment (with a 10% or 20% down payment).
Because income growth in 2017 and 2018 will not keep pace with growth in income required to buy the average home, it is wise to purchase an investment property that will lower your monthly expenditures. With 37% of all dwellings in Sudbury being rental units, the first-time home buyer has plenty of properties to choose from (Statistics Canada, 2016). According to the Canadian Mortgage and Housing Corporation, Greater Sudbury will see a strength of multi-unit demand for 2018. Additionally, the CMHC predicts that although affordability may slightly decline into 2018, the market will be most suited to first time home buyers.
Are you looking to own your very first property but concerned about the expenses attached? Consider investing in a rental property! Contact me below with any questions or comments!