WHY YOU SHOULD CONSIDER PARTNERING UP TO BUY A HOME

This is something that our generation seems afraid to discuss, but I believe it is an important thing to consider when thinking of buying a home.

Being a part of the younger generation, I can empathize with most when it comes to the topic of housing affordability. With housing prices continuing to rise to all time highs, the odds of securing a mortgage continue to be stacked against us. I believe it is extremely important to remain creative in terms of your approach. Many young professionals are now being priced out of the market. While we’re unsure of what the housing market has in store, if prices continue to rise at their current pace, most of us will be stuck paying rent every single month for the rest of our lives.

I became a REALTOR® because I am extremely passionate about home ownership. I paid rent for the first time when I was 17 years old. It did not take long for me to understand what that actually meant. My rent was going towards my landlord’s mortgage payment. When that money left my account, I would never see it again. My landlord probably made a small profit, and the rest went towards paying down her loan. She would see all of that money again if she ever decided to sell the property. As long as that house remained in decent shape, its value would probably increase. So, not only was I paying for her to own a property, but she was making money off of that property going up in value.

Now, I’m not saying that I have anything against landlords. I actually feel the exact opposite. Landlords provide an important service. Not to mention, it is the number one way that middle class citizens in North America are able to climb out of the rat race and reach a level of financial stability. There will always be people that need temporary, or semi-permanent housing. I think it’s important that there are opportunities for everyday folks to not only provide that service to people, but to be given the chance to prosper through providing housing in an ethical way.

Back to the topic of private home ownership, and the concept of partnering with a friend to buy your first home. A study done by the Financial Post in 2012 shows that the average Canadian moves every 5-7 years. If you’re renting, in most parts of the country, it’s safe to assume that you’re sharing the space with a roommate. As stated above, if you’re paying rent, you’re basically just pouring money into somebody else’s investment. So why has it not become common place to buy and share a home with your best friend, or for you and your partner to join forces with another couple to buy a place? I understand that everybody wants a house to call their own. I understand that the thought of living with the same person, or people, for 5+ year can be a tad daunting. Do you know what else is a tad daunting? Never being able to afford a home, ever. Imagine fuelling your landlord’s investment for the rest of your life because you couldn’t make a 5 year sacrifice to build equity in a home with one or two of your closest friends? After that first 5 years, there’s a good chance that you will have enough equity in that shared space for everybody to go their separate ways, with a down payment for a place to own by themselves.

We should spend more time looking at home ownership as a business. Your landlord does. If your parents have made hundreds of thousands of dollars though home ownership, I’m sure they see it as a business as well. Most people don’t get into business independently. Start up costs are too high. There are too many risks. If you start to slip, so does your business. Most businesses have multiple pillars. Business owners aren’t ashamed because they are 50/50 partners with their friends. If you’re going to be paying rent and living with roommates anyway, why not take the risk and invest together?

I’ve put together the following comparison to show you what your finances will look like in 25 years if you were to buy a home, or continue to rent.

I’m sure that these are thoughts that you’ve already had, but it is eye opening once you see the numbers on paper. Over the course of 25 years those rent payments can really add up. I preach home ownership to my friends on an annoying level. Honestly, I wouldn’t be surprised if most of them had me on mute. At the end of the day, I chose this career path because I understand real estate, and the importance of home ownership.

Everybody says that you should do what you love, and that you should try to have a positive impact on the world. Well, this is what I love, and if I convince just one person to get out of the cycle of paying rent, then I truly believe I have done something good. Give it some thought.