As condo prices continue to rise, and with single family homes now practically out of reach for many first time home buyers, how can they possibly get into the market? Have they missed the boat, and are they doomed to be tenants forever? The answer is no, they have not missed the boat, and there are other very viable options.

As I think back to when I first started in this business 35 years ago, it was extremely rare for anyone to consider buying a home that didn’t have a basement apartment or a second floor apartment. This is how families bought their first home, and also how many single people did the very same thing. To this day, some of my clients are still holding onto the very first multi-family home I sold them, even though they now live in a single family home elsewhere. That first home is now an income generating property for them, and part of their retirement plan.

This wasn’t invented by my generation, this has been going on since the beginning of time. My parents, like most others at the time, bought a large three-storey home with a kitchen on the main, second and third floor. There were no separate entrances to each apartment, and the second and third floor tenants would share the second floor bathroom. Somehow, people got along and they made it work. It wasn’t until I ended up in the real estate business that I asked my parents how they bought their first home, how much it cost, and what the payments were like. As it turns out, they had a positive cash flow and we lived on the main floor and basement for free. Can you imagine living for free today?

Of course times have changed, and living with strangers in your house is not something everyone is willing to consider today. However, there are houses with two, three, and four separate apartments, each with their own private entrance. In most cases, these multi-family homes are not that much more expensive than a single family home in the same area. With as little as 5% to 10% down (5% on the first $500,000, and 10% on the amount above $500,000 to a maximum of $999,999), a tenant will cover close to half of your mortgage payment. Now this isn’t living for free, but it gets you into home ownership.

Another great option is buying with a friend or family member. This makes it easier if neither of you have a large enough down payment. If there are two separate units, each of you occupies a unit. If there are three apartments in the house, you can rent out the third apartment to cover the property taxes and utilities. This is a great way to get started: just ask anyone who bought many years ago, you might be surprised how many people bought their first home with a partner.

I have two properties coming for sale this summer that will be perfect for anyone that wants to get into the market. One has four completely separate apartments, and one with three separate apartments. Both of these properties will be perfect for anyone that wants to get into the market without having to work day and night to pay the mortgage.

If you are tired of being a tenant, let’s get together for a coffee, and let’s talk about how you can make the transition from tenant to home owner/landlord.

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