Property Ladder - One Step at a Time

Many of the first-time home buyers that I have dealt with have been surprised, and maybe even a little disappointed, to see what $200,000 can get them. While it’s true that $200,000 will seldom get you a downtown condo with granite counter tops and stainless steel appliances, it’s important to know that $200,000 can still get you a very nice home – you just have to know where to look and you have to be patient.

If you’re shopping with that amount, here are the types of homes you can expect to find in your search – 2 and 3 bedroom townhomes east of Vanier, west of Westboro and south of Alta Vista, or a bachelor or 1 bedroom condo downtown or in the Byward Market. Some of you may look at those options and think to yourself “Those types of homes don’t interest me - I’ll just continue renting until I’ve saved enough money to buy what I really want”. In theory, that is a great idea, but in reality, if you keep putting off that first home purchase, chances are you’ll never end up buying that first home – the most important and hardest step to home-ownership is the first one – stop renting.

So, you’ve given your landlord your 2-month notice and you’ve started your home search but you haven’t fallen in-love with any of the properties that you’ve seen – you’re life in ruined, right? Wrong. For you first-time buyers out there, it’s important to keep in mind that you won’t be living in that first home for the rest of your life; in fact, the average Canadian lives in their first home for 3 years or so. In those 3 years, you want to make sure that your house is working for you. If you used an experienced Realtor to help you in choosing your home, you can reasonably expect your $200,000 home to be worth between $225,000 and $235,000* (or possibly more) after those 3 years.

Then you’re on to your second home and your house budget has increased by $25,000-35,000 and the types of homes you are able to afford include 3 to 4 bedroom townhomes in Kanata, Gloucester, Nepean, Orleans, Barrhaven, etc…, 2 to 3 bedroom townhomes in the downtown area, large one-bedroom and two-bedroom apartments and even some small single family houses. In just 3 years, the type of home you can afford has drastically changed.

Again, let’s fast forward another 3 years, now your $230,000 house has now increase to over $265,000* and your house budget has increased yet again. And again, the types of homes you can afford start looking more and more like that dream home you’ve always imagined.

Using this example, in those 6 years that have past, your home equity value has increased by $65,000 – that’s like someone giving you over $10,000 every year, for free! So, for those of you who have decided to continue renting and wait until you’ve saved up enough money, would you be able to save over $10,000 each year?

If you have any questions on how to stop renting and start owning, please feel free to send me an email at: tbennett@kwottawa.ca or visit my team’s website at www.bennettpros.com

*Calculated using the average increase in property values in Ottawa of 6.15%

Open House - Near the Byward Market - Sunday, March 15, 2009

Feel free to drop by my open house this weekend in the Byward Market. I will be at 260 Besserer St. showing the PH03 unit. Come on by and take a look at this beautiful downtown condo, or just come on by to say hello.

See you Sunday!!

If you have any questions or concerns regarding this, or any of my other posts, please contact me at taylor@bennettpros.com