First Time Buyer Own to Rent

Posted: January 21, 2013 in Buyers, Investment
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In these trying times buying a home can seem like impossibility especially to first time home buyers. But the story of 27 year old Sean Cooper as related by James Daw, a former Toronto Star columnist and a Certified Financial Planner, gives hope to those wanting to be home owner and still trying to keep above water and work on their retirement investment.

Home ownership seemed out of reach for Sean Scott, a junior employee earning only $40,500 a year at a financial consulting firm.

Scott McGillivray

Scott McGillivray

But he worked part-time in a store, earning about $11,500 a year, to avoid having a large mortgage and shopped carefully until he found a home for $425,000. Now he can concentrate on his retirement plan.

To do so, Sean lives in the basement apartment while the tenants upstairs pay much of his mortgage and ownership costs, at least until he is out of debt. “I got the idea from Scott McGillivray, host of Income Property on HGTV Canada,” he admits.

While living at home with his parents and paying rent to them before purchasing his own home, he managed to  save a substantial sum. He shopped for about two years before buying his three-bedroom bungalow with an attached garage, not far from his mother’s home.

His mortgage is only $255,000. At the current rate of 3.04 per cent interest, the minimum monthly payment is $1,078. Rental income of $1,480 is more than enough to cover this cost, plus nearly half of the cost of energy, water, insurance, property tax and budgeted maintenance expenses.

Cooper could afford to pay $11,000 or more each year toward mortgage principal repayments. At that pace, the mortgage would be gone by the end of 2021, provided interest rates do not increase. The increased home equity will provide Cooper with greater financial flexibility.

“I don’t really plan to live downstairs forever,” Cooper concedes.

He thinks his house will be a good long-term investment, even if the sale value were to decline temporarily. “I think this house will meet my needs for the next few years.

Becoming a home owner can be a challenge in itself and dealing with an experienced Realtor is a must. Dealing with a Realtor that knows about investment ownership from personal experience is not an option. Dale Dyer is such a Realtor. As many of his clients already know and have taken advantage of his broad knowledge of Real Estate investments. You too can become a home owner. Give Dale Dyer a call today!


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