You’re comfortable. Maybe it’s the property that’s ideal, and you could not afford to buy its equivalent.
Maybe your rent is affordable because you’ve been there a while.
Or maybe you love the neighbourhood, and you’d have to live somewhere less awesome if you purchased.
So don’t. Keep renting.
That doesn’t mean though, that you aren’t able to start building equity for your future through real estate.
We’ve had clients (heck we know Realtors) who rent their primary residence but are landlords elsewhere.
There is no reason you must live in your first real estate purchase.
Consider buying a studio apartment in Toronto, or a one or two bedroom apartment or townhouse in Hamilton or even a small detached in London and renting it out.
If managing the property sounds like too much work or outside your comfort zone, there are people/companies who can do it for you. When your investment property is in another city, this is usually a good route to go.
The fee is generally one month’s rent per year for management, and another month’s rent for tenant searches, if you prefer not to do that yourself.
If you have the budget and appetite for it, a small house located within a reasonable distance to a college or university, rented to students can be lucrative.
Start with one property. Later, when you’re ready, you can borrow against some of the gained equity in the first property and buy another.
Or, if things go well, and you’re ready to move, you might consider drawing equity to buy a primary residence that suits your needs.
Finding a cash-flow positive property can be a challenge. So it’s important to run the numbers carefully.
As of this writing, in downtown Toronto, a cash-flow positive studio apartment, without a massive downpayment is pretty much impossible to find.
But once you branch out to Hamilton and even moreso to London, and look into multi-unit homes, your chances of finding something with a reasonable cap rate increase significantly.
By making smart investments in communities with growth potential, strong rental markets and lower purchase prices, you can get your start on the property ladder.
You don’t have to spend your savings on your primary residence. Keep renting if you like.
Know your options.