First-time buyers becoming landlords
After years of paying rent, first time homebuyers in B.C. say it’s time they started collecting it. According to the 2011 TD Canada Trust First Time Homebuyers Report, 56 per cent of first-time homebuyers in B.C. are looking for a home with a rental unit. Eighty-five per cent think the unit will generate between $500 - $1,000 per month and seven-in-ten say the extra income will go towards paying their mortgage.
“Taking in a tenant can be an effective way to supplement your income and pay off your mortgage faster,” says Barry Rathburn, manager, residential mortgages, TD Canada Trust.
The survey also found B.C. buyers to be saving up the longest for their first home and putting down the largest down payment. Nearly six-in-ten say that they have been saving for their first home for three years or more (57 per cent versus 47 per cent nationally) and they are twice as likely to be putting down a down payment of more than 25 per cent compared to buyers in other provinces. Not surprisingly, buyers in B.C. are most likely to need a mortgage to finance their purchase (93 per cent versus 87 per cent.)
In B.C., 47 per cent of first-time buyers plan to purchase their first home on their own (rather than with a co-purchaser). Nationally, nearly six-in-ten men will buy on their own, along with 33 per cent of women. “Buying a home is a very big purchase and it’s great that so many British Columbians feel financially equipped to take on the expense independently,” said Rathburn. He recommends that people take on a mortgage that allows room in the budget to set some money aside for the future, because should the buyer’s financial situation change, he or she is the only person legally responsible for the mortgage. B.C. first time homebuyers are most likely to say they would not compromise on:
• Price (53 per cent)
• Number of bedrooms (44 per cent)
• Number of bathrooms (35 per cent)
They are most willing to make concessions about: the proximity to recreational activities, features of the home and the home’s layout, the survey found. British Columbian first buyers were most likely to research mortgage options, calculate closing costs, and estimate the cost of heating and water this year than in 2010. The survey was done from April 29 to May 16, 2011 results were collected by Environics Research Group. Data was collected from 1,000 Canadians, including 131 from B.C. Who had either bought their first home in the past 24 months or intend to buy their first home in the next 24 months.
Source: Real Estate Weekly. Article from the Real Estate Weekly. Internet Edition Vol. 19 Week of Jul 1 - Jul 7, 2011