Today’s real estate market for aspiring first time home buyers especially, looks pretty intimidating. Many think of owning real estate as something that has become too far out of their reach as prices seem to climb higher by the month. The real estate market in Toronto has been described as the hottest in the world. Prices in 2016 were up as high as 33% over 2015, and in the first quarter of 2017 homes in Toronto reportedly sold for 1 million dollars over the asking price.
For those who already have a foot or even a toe in the real estate market, congratulations. But for those who are still working towards it, do not loose hope, it is definitely still achievable with some determination and hard work.
Here are my tips for reaching your goal of home ownership faster:
1. Increase your income
If you are in a position to sacrifice some free time, get a second job on the weekends or a few evenings during the week. Clean out your closet for a small return from consignment or second hand shops. Do you have a skill you can teach? Advertise your service and become a part time tutor. Speaking from experience, it will not be easy. In fact it will suck when you see everyone else going out and having fun and you are forced to politely decline the invitations. But when you remind yourself why you are doing it. Spend time visualizing the end result of your hard labor, it will be so worth it. Think of it as spending hours in the gym to get in shape. Pushing yourself will be painful, but after a period of time, you look in the mirror and think wow, I look great! I’m glad I worked out so hard.
2. Consider part ownership
If you can’t afford the entire purchase price on your own, you can purchase 25%, 50%, 80% etc. Keep in mind that this is more of a business transaction as you will have a partner or multiple partners who own the same property. Be sure to seek legal advice before going for this option. In England, part ownership is very popular, it is also allowed in Canada, but has not been explored or talked about because until the recent real estate boom, it was affordable to own 1 or 2 houses in Canada. Times have changed pretty quickly.
3. Cut your expenses
If you don’t have the option to increase your income, that’s ok! Take a really good look at your budget. Are you spending too much on what I call ‘bonuses’? These are things that are not 100% necessary, for example vacations, buying new clothes, entertainment, hobbies etc. Evaluate your current lifestyle and determine what is absolutely important for you to keep in your budget and what you can sacrifice in order to meet your goals faster. Here are a few examples of things that can help you reduce your monthly expenses: Get rid of cable and use the internet to watch your favorite shows. Find a smaller apartment. Car pool to work to save on gas, car insurance and maintenance costs. Take a new hobby of couponing to reduce your grocery spend. Make your lunch or coffee at home and take it to work with you. Go out with your friends once a month instead of every weekend. I could go on and on, but you get the idea. I am not saying to do all of these things, but do what works for you and your lifestyle or situation. Every little helps and you will be so proud of yourself once you achieve your goals.