Ownership Alternatives

The real estate market has seen a surge over the last couple of years and although the term 'crazy' has been thrown around quite frequently, it’s not as crazy as one might think. Price appreciation is higher than we are used to seeing, but it’s not that much higher than we have seen on an annualized basis over the last 25 years. Contributing factors include historically low inventory levels, low-interest rates, and a pandemic causing many to re-evaluate their lifestyles.


Many are being priced out of their ideal market because of the escalating prices in Southern Ontario. But there are some alternative options available that allow buyers to get into the market and build equity. Here are some options to consider to improve your chances of homeownership.

Most Ontario cities have recognized the need for more housing. Many municipalities now offer two-unit zoning where single-family (one-unit) housing used to exist. This creates an opportunity for some first-time homebuyers to add a secondary unit to a home that they purchase to assist with the monthly carrying costs of the homes.

We are seeing this in 1000+ sq. ft. bungalows where people live on the top floor and renovate/ rent the basement to offset monthly carrying costs and mortgage payments.

Family and/or friends have been pooling their resources to purchase a property together that they will all live in. An example of co-ownership is two different clients purchasing a 4-unit building together. Each client occupies a unit then they rent out the other two units. This fast-tracks their mortgage and builds equity.

Some people are lucky in that their family members have assisted them with a down payment or contribution towards their purchase. Positioning the money as an investment (instead of a donation) is attractive to those contributing. The two things that would entice family investors (or any investors in that case) would be an agreed-upon interest payment for the borrowed money, and/or a percentage of equity in the home related to their invested amount.

A second unit is a self-contained dwelling unit with a private kitchen, bathroom facilities and sleeping areas. It can be located in your house or on your property, above a laneway garage or in a coach house.

Adding a second unit is a great way to provide independent living for a family member or make a little extra money to help pay off the mortgage. But there are requirements you need to consider beforehand, so make sure to do your research.

If you want to take the next step, book a strategy call with us to see if we can help you with your next move.

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