Trying to figure out how to buy your first home? With the high cost of Real Estate in Metro Vancouver many young people think it’s impossible for them to purchase their own home. Although buying Real Estate is expensive, with a lot of hard work, realistic expectations, and some creativity – nothing is impossible!
Let’s be completely honest here, for the average person buying your first home will not be everything you have ever dreamed of. But, with the right investment, and time, your equity will allow you to move on to bigger and better things. For this reason, it is essential to manage expectations when purchasing your first property.
The Lesson
Your AWESOME Realtor quickly learned this lesson back in 2009. At the age of 21, when she purchased her first investment property. She was going to buy a condo! Downtown. Ideally in Yaletown or Coal Harbour. It would be in a high rise. Have huge windows. A view. Be brand spanking new, with parking and concierge.
After looking at properties and getting her pre-approval, reality slapped Anita in the face! These condos were WAY over budget, so she had to re-strategize. She eventually bought half of a newer 500 sq.ft. “junior” 1-bedroom condo (that’s the fancy way of saying studio), in a concrete low rise, with ONE window, in Marpole. Yes, half because she ended up buying with her sister. And yes, Marpole is as far away from Coal Harbour and Yaletown as it gets on the West Side.
Expectations and reality clearly didn’t line up, but they took what they could get. They were cash flow positive each month, turned a profit in the end, and ended up moving on to bigger and better things. So, the moral of the story, your path to home ownership may not look like you expected, but you will get to where you want to be in the end… unless you want a $25 million mansion, we really cant guarantee that.
4 Creative Ways to Buy Your First Home
Buy Your First Home With Someone
Buy your first home with a parent or sibling. This is a great way to reduce the amount of down payment you need and bump up your pre-approval. But, it is essential to make sure you both have the same long and short-term needs and are willing to hold the property for the same length of time.
Sacrifice Location
If buying in your ideal location is not feasible, look at different locations. We aren’t saying move to Mission if you wanted to be in Downtown Vancouver, but if you like the walkability and access to restaurants etc. of Downtown then consider areas like Mount Pleasant or Grandview Woodlands which also have great walkability and access to restaurants at a slightly lower price tag. There are many up and coming cities and neighbourhoods that have a lot to offer if you take the time to explore them. If you buy into them before they are fully discovered you can make a nice profit.
Size and Appearance
Alternatively, compromise on size and looks and go for the smallest, lowest price property in your ideal location. Once you start walking through these smaller condos, you will realize that if a condo is well laid out, it won’t feel as small as it is. You will need to get creative with storage and get rid of all those things you own but never actually use. Renovations can be done over time as you settle in to the place. These will also help increase your future resale value.
Presale Condos
If you have 10 – 20% down payment now, but are wanting to have a larger down payment to make your monthly payments lower, you may want to consider a presale. Concrete high-rise will take around 3 years to build, which gives you more time to save, before you need to start making mortgage payments. Most developments have staggered deposit structures, so you will not be required to have the full deposit amount upfront. You can read more about presale purchases here
These are some of the best ways to make your transition into home ownership easier. To learn more about these options or for help creating a customs plan that works for you contact Your Two Awesome Realtors today!
