Real estate prices have been rising steadily since 1996 with minor downward blips every few years, usually caused by government regulations in an effort to slow down the housing market, as happened most recently in 2017.
Rising real estate prices also raise parents’ anxiety about where their kids will live when they move out of their family home. We know this because we hear it from the many parents who call us weekly and ask, “Will my kids ever be able to afford to buy a condo, a house, or for that matter, even to rent in the city”?
It’s a very difficult reality to come to terms with, especially for many parents who want to “do” for their kids. And although as parents we are all in the same boat, I have a few pieces of advice for parents, myself included, and millennials who are looking to get their foot in the real estate door, whether it be to buy property or rent their own place.
Once you’ve established a plan for saving for the down payment, there are a number of ways your kids can get their foot in the real estate door:
- Buy a two-bedroom condo and rent one of the rooms to a friend.
- Buy a condo in an older building where prices are cheaper, and spaces are larger.
- Buy a property located in a less popular neighborhood in the city. At some point in the future, this area will become more established and more desirable, making your investment pay off.
- Buy a condo or small house with a basement apartment with a friend and share the cost of carrying it.
- Buy a small building with a few rental units that your kids can live in and rent rooms to their student friends. This allows your child to learn the responsibility that comes with home ownership and builds character.
The reality is, that many of our children will need our financial assistance to buy or rent in crazy expensive Toronto. Nevertheless, we need to help our kids establish a lifelong mindset of saving and sacrifice and remind them that they are ultimately responsible for their own lives.