Millennials ruin everything. That’s what they keep telling us. We’ve been blamed for the degradation of beloved traditions like marriage, golf, the 9 to 5 workday. Even the disappearance of wine corks, doorbells and bar soap has rested on our shoulders. The truth is millennials inherited a world that no one knows how to navigate. The older generations have little to no helpful advice for a world they barely recognize. We are by necessity rethinking and reinventing the societal structures that exclude large populations of people and simply don’t work for most of us. We upcycle, grow veggies in the front yard and love our pets like children. We are the generation with the least amount of wealth and also the least amount of consumer debt. We value experience over material possessions and have low delinquency rates on the debt we do have. We work multiple jobs and have multiple side hustles to navigate an unstable economy. We’re smart with the money we have because we have to be.
Spending half your income on rent is the norm and rehoming pets due to housing restrictions is becoming alarmingly commonplace. Even if you find a nice place to call home with rent you can afford you know the bottom could fall out from under you at any time when the landlord calls and tells you your home is for sale and you will have to find somewhere else to live in a few short months.
I’m not going to sugarcoat it, it looks grim. It’s laughable these days to think about our parents and grandparents buying a house for three times their annual income, able to rely on a consistently increasing salary at a stable job to make the low low payments and retire in comfort. We can rethink and reinvent how we buy houses and how we live in our homes. Because reinvention is what we do.
You’ve been waiting your whole adult life for the market to crash, but what if doesn’t? Here are some creative solutions to consider regardless of what happens to the price of property. If you are waiting for a crash, you want to be ready when it happens.
1. Joint tenancy is when you co-own a home. Both of your names are on the title and you are likely in some form of an emotionally committed relationship. Have you heard about tenants in common? That’s when you own a percentage of the house and someone else, (your bestie, sibling, investment partner) owns the other half. You can live one upstairs one downstairs or share the space however you want. This can be a great arrangement for a couple of young families, single or newly divorced parents or single people not looking to enter into a romantic relationship but having no hope of owning on their own. Maybe one of you lives in a secondary dwelling like a carriage house or a tiny home on the property. Down the road, if you want to go your separate ways, you can sell the house and split the equity, sell half to the other resident, or an agreed-upon third party. You want to make sure you talk to a lawyer if you go this route. Good fences make good neighbours and so do good contracts.
2. Speaking of tiny homes, did you know tiny homes and container houses are subject to the same building and permit bylaws as any other home? Your tiny home is a house as long as it meets code. There is a lot of affordable land available if you are willing to step outside of town. With the rapid growth and increasing population of every small town in BC, your property that’s 30 minutes out of town right now could be close to amenities within ten years and be worth substantially more. Always have your realtor do their due diligence before you buy. Ask them about zoning, subdividing, building restrictions and building codes. Make sure you can realize your dreams before you make your offer. If you find something you can subdivide, you can invite all your favourite people to build a community of tiny homes together, and finally have the community garden of your dreams.
3. If you’re firmly attached to your urban centre for all the reasons, think about investing in rental properties in small towns. You’ve been saving forever but you only have $40,000 in your TFSA. That’s way below the 20% you need for a million-dollar home in the city but it’s enough to get a $200,000, two-bedroom apartment in a small community. Even if you only have $10,000 to put down an insured mortgage can get you the rest of the way. Always talk to your mortgage broker first, but with today’s low interest rates your payments will be well below the amount of rent you can collect. If you continue to save, let your renter pay the mortgage as your investment builds equity and have a little residual income to keep saving or take some financial pressure off. Within 5 years your initial investment will have multiplied. Many towns on Vancouver Island are taking off, talk to your realtor about where the best investment for your money is.
4. Multigenerational households are becoming more and more common by necessity. A lot of families are leaning into this option as daycare and seniors care are becoming more expensive, less available, less reliable and in some cases a little scary. It’s no secret that the boomer generation has the largest share of the property wealth, multigenerational households are a great way to avoid inheritance tax and pass that wealth to the next generations while forming and maintaining strong family bonds. Many millennial parents have had to move back home to raise their families anyway, pooling resources to get a home that works for everyone could be a great solution.
Whatever home or living arrangement is going to work for you, it’s going to take some planning. Talk to a mortgage broker or financial advisor first. Find out where your credit is sitting and what steps you need to take to qualify for a mortgage. Establish a budget and identify potential roadblocks between you and your home. Then work with a realtor to get an idea of what is available where you want to be and what type of property is going to meet your needs. Your realtor will keep you up to date on market changes and help you zero in on the type of property that will meet your needs while you go through the process of qualifying for a mortgage. The right home is the foundation for the happy and healthy life you deserve.
Whatever home or living arrangement is going to work for you, it’s going to take some planning. Talk to a mortgage broker or financial advisor first. Find out where your credit is sitting and what steps you need to take to qualify for a mortgage. Establish a budget and identify potential roadblocks between you and your home. Then work with a realtor to get an idea of what is available where you want to be and what type of property is going to meet your needs. Your realtor will keep you up to date on market changes and help you zero in on the type of property that will meet your needs while you go through the process of qualifying for a mortgage. The right home is the foundation for the happy and healthy life you deserve.