Romina Maurino – The Canadian Press

The thought of buying a home on your own may seem a little daunting, but that’s exactly what many single professionals are choosing to do.

And that’s a good thing according to real estate and financial experts, who say the investment is worthwhile.

“The rental market is very expensive in Toronto and mortgage rates are so low that, in a lot of cases, it makes more sense to buy,” said realtor Miranda McKenna of Life and the City, Remax Hallmark Realty Ltd., who says nearly half of her clients are single.

People understand that it’s worth buying a property to get into the market and build equity as early as possible, she said, and many of her clients use that first purchase as a stepping stone toward buying the home they really want.

Comment: I have one client who bought new 4 years ago, then rented out the unit, and is now selling it. The profit will go toward one to live in, one closer to work and downtown. And they are barely in their 30s!

That also means buyers are getting younger, McKenna said, noting that more people in their 20s are buying, and that many of them are single professionals.

Jordan Allison was 23 when he bought his first condo. At the time, he just wanted his own place and figured it would be a good investment, given how quickly home prices were climbing.

“The condo was a dress rehearsal in a way,” said Allison, now 30. “After going through it with the condo, I knew what I was in for with the house.”

He sold his Toronto condo to buy a house four years ago, and rented the house as two units while he did his masters degree in Boston.

Once he moved into the house, he kept one of the units as a rental to help cover the mortgage — something he’d recommend to other single home buyers.

“Those tenants are really your second spousal income,” Allison said.

Comment: And I swear duplexes are easier to buy than single family homes. There is far less competition for them.

David Stafford, managing director of real estate secured lending at Scotiabank, said one of the biggest differences between buying as an individual, versus a couple or group, is income instability.

“If you have a couple, or a partnership of some sort, buying a home – there’s two incomes to service the home. If somebody gets sick, or loses their job, then you don’t go from all to nothing,” said Stafford.

“If you’re on your own, (you should) make sure you have a backup plan.”

He recommends purchasing disability or health crisis protection insurance, or, like Allison, taking advantage of rental income (if the property has the right set-up for it) to help cover base expenses.

He also advises all homeowners to take a close look at the closing costs, maintenance expenses and property taxes that will come with the mortgage payments in order to get a true sense of the monthly payments.

TD Canada Trust also recommends setting a realistic budget and determining the total down payment, and then test-driving the monthly mortgage payment by making an automatic transfer of that amount into a TFSA or other high-interest savings account. That will help determine how comfortable the commitment is before locking in, while allowing you to save for a larger down payment.

A recent online survey of 6,000 Canadians aged 18 years and older by TD found that a quarter of those who bought a home in the past 24 months (or are planning to in the near future), did so on their own. The results of the poll, which was conducted between Feb. 11 and 25, were in line with figures from Statistics Canada, suggesting singles have increasingly moved toward home ownership.

According to McKenna, another key consideration is to buy into a neighbourhood that will provide good resale value.

“You don’t want to buy in a terrible area that isn’t going to have good turnover in the future and isn’t going to be a good investment,” she said.

Comment: Well duh…

As for Allison, he is now in a relationship and he and his partner are thinking about moving in together.

He says the rental suite in his home has done so well that they’re considering keeping that house as a rental and buying a new place. Meanwhile, he knows people who are now just looking to get in the market and can’t even afford the neighbourhoods they want.

Comment: I have had more than a few clients do that. When they grow out of the first place, they keep it and rent it rather than sell it. The value is there, plus it is so easy to keep something tenanted these days. They bought it 5 years ago, paid down a bunch, plus seen quite a price increase. Now, they shift to having a tenant pay of the rest of the debt.

His advice to anyone still debating whether to buy and wondering whether it will be a worthwhile investment is to “just jump in” and start building equity in their home.

“I would say the sooner the better,” Allison said.

Comment: The best time to buy is always yesterday. Prices and interest rates generally only ever rise. Even if rates stay flat, prices are rising. All real estate will cost more in the future than it does right now.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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