Your first home may not be your forever home

Your first home may not be your forever homeHome ownership is a goal for most of us, and millennials appear to be the most optimistic group. According to an RBC poll, two in five millennials said they intend to buy a home in the next two years. But the cost of home ownership and things like regulatory changes can make saving for a downpayment more difficult and, for many, put the dream of home ownership out of reach.

Sometimes, however, first-time buyers may not be looking at all their options. A little flexibility and compromise can help make ownership more accessible when considering the following:

Begin with a starter home. Few people spend 50 years in one home these days. Think about your lifestyle for the next five to 10 years and make a decision based on that. Your dream home in your dream neighbourhood may still be yours, just a bit later in your life.

Get a renter. Could you afford the home you want if you rented out part of it? Many people create a basement apartment or rent out a second bedroom as a way to offset their mortgage payments.

Consider co-ownership. Buying a property with family or friends is a great way to get your foot in the door. Discuss options with your mortgage specialist and be sure to establish a solid contractual agreement that will help avoid or mediate any future disagreements when selling the property, renegotiating terms or buying each other out.

Be realistic. Don’t expect perfection. Every home has some issues and you may have to compromise or decide what you can and can’t live with. What is a permanent feature versus something that’s an easy aesthetic fix? Set your priorities, but be realistic and flexible.

Be patient. Style your home slowly and resist the temptation to furnish it from top to bottom the day after you move in. Get creative with chic but less expensive, gently used furniture or pieces that may not last a lifetime but will save you money today.

Find more information online at rbc.com/home.

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Should you rent or buy a house for your student?

Should you rent or buy a house for your student?With high school students across the country deciding on their post-secondary education right now, where they will live while at school should play an important part in the decision. Given that more than two-thirds of post-secondary students plan to live away from home during their studies and parents often foot the bill, have you considered how much it will cost?

While many rent, some parents opt to invest by purchasing a home for their kids to live in while away. But when does this option make sense? According to Nicole Wells, vice-president of home equity finance at RBC, there are five questions you should ask yourself when deciding.

1. What is the market is like? The conversation will be different depending where the school is located. In a more urban market, prices may be high compared to smaller towns, where you might find a better deal. Is the market volatile or stable? Do your research first.

2. Do I want to be a landlord? If you’ll be renting to your kid’s roommates as well, make sure you look into the logistics and legalities of being a landlord. Are you prepared to handle the maintenance on the house? What if someone doesn’t pay their rent on time?

3. When do I plan to sell? Will you sell as soon as your child finishes school, or continue to rent it out? You may get more value by holding on to it as a rental unit. Being a university town, there likely won’t be a shortage of renters.

4. Who will benefit? Is this a short term play, or are you planning ahead for other siblings that might go to the same school? Think about holding onto the property for longer to gain more value and plan ahead.

5. Have I run the numbers? Calculate the break-even point and when you would see profit. Don’t forget to include “extras” such as maintenance, repairs, taxes and insurance. You also need to put yourself first and ensure you aren’t drawing on retirement savings that might put your future in jeopardy.

Find more information online at rbc.com/home.

www.newscanada.com

Top tips to create an ideal income suite

Top tips to create an ideal income suiteFrom the condominium craze to the rise of multigenerational living, the climbing cost of homeownership across Canada continues to spawn new trends. The transformation of basements into rental suites is a big one that can help offset mortgage costs. There are plenty of advantages, as well as some important considerations to ensure the best result.

Do your homework. Check zoning, bylaws and adhere to your local building code. As with any new construction or renovation, building permits must be obtained, and all work must be code compliant. This will protect you and any future tenants.

Waterproof it. Check the interior foundation and floors for existing moisture issues, water damage or mould problems. Address any primary moisture issues before finishing the space.

Insulation is key. As a landlord, it’s wise to invest in smart renovations that can improve efficiency and bolster your bottom line. For the best results, insulate well. I recommend installing a rigid board insulation, like Rockwool ComfortBoard 80, against the concrete foundation before you stud the wall. The board is mechanically fastened or adhered to the concrete foundation wall, which prevents thermal bridging through the studs, providing better thermal performance. Finish with a moisture-resistant and dimensionally stable insulation between the studs, like R14 Comfortbatt, to protect against common basement issues such as mould, mildew and rot.

Consider fire safety and soundproofing. Select building materials with a high fire-resistance rating that will not off-gas or contribute to toxic smoke in the event of a fire. Soundproofing is also a must when you plan to share space. Install sound absorbent insulation between floors with resilient channels to reduce sound transfer between living areas. Contractors love stone wool fire and soundproofing insulation, because it protects against fire and noise and is easy to install.

Spend wisely. Keep the renovation budget reasonable. Spending no more than two years’ worth of rent to convert your space is a good general rule of thumb. Forego high-end finishes. Instead, create focal points that will “sell” the suite.

Scott McGillivray is the host of the hit HGTV series Income Property and Moving the McGillivrays, a full-time real estate investor, contractor, author, and educator.

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What millennials want in a home

What millennials want in a homeWhen entering the residential market, it’s important to appeal to as many people as possible, especially young, first-time homebuyers. They’re one of Canada’s fastest-growing markets, but their tastes and priorities are quite different.

“The next generation of first-time homebuyers knows exactly what they want in their first major investment,” explains Christopher Alexander, regional director at Re/Max Integra. “Sellers need to be strategic before putting their home on the market to appeal to these needs.”

Here are the top three factors influencing millennials’ purchasing behaviour:

Location, location, location. It’s widely known that finding a home in the right neighbourhood can significantly increase ROI long-term, and millennials are taking extra note. But homes in communities where new schools and amenities are being built are attracting young buyers looking for “what’s next,” rather than what’s hot now. Up-and-coming neighbourhoods that are slated to receive investment from the city or are under redevelopment are prime for real estate investments as smart millennial buyers realize their value will only continue to rise. If the neighbourhood is walkable, that’s a bonus.

Smarter living. With exciting advancements in the ever-growing tech industry, preparing your home to appeal to a hyper-connected millennial market is easier than ever. From installing fridges that text you when you’re low on milk to wireless light switches, sellers who make even a small investment in a smarter home will instantly attract tech-savvy first-time buyers. Adding innovations such as a programmable thermostat will not only make your home appealing to the eco-conscious young buyer — the remotely adjustable tech can also help lower your utilities bills as you wait for your closing date.

Looking ahead. As a home is typically the first major investment most millennials make, it needs to be able to suit their growing list of needs. While young buyers may not have children now, many are already considering multi-bedroom homes and properties with backyards in anticipation of a soon-to-be expanding family. Investing in backyard landscaping and clearing out clutter to make space for a possible play area or nursery is a great way to appeal to young families looking for a home they can see themselves grow in.

www.newscanada.com