Hi My current rent is $650. It's a room in a 2 Bedroom house in Winnipeg, Canada. In 3 Months I'll be married and move to a separate house. Any decent 2 Bedroom house will cost CAD$1200/month including utilities (maybe more).
I have CAD$15,000 saved and can use it as a down payment on a house. I don't know how much it would cost on a monthly basis to own a house. How can I know that? and how much should the monthly expense be, to make buying a better option?
Looking for suggestions #Winnipeg #Canada #Rent #Buy
Investor · North Bay, Ontario · Member since 2019 · 221 posts · 99 votes
5y
@Ashar Ali RENT! Rent a place you can comfortably afford for now. Once you are ready to buy a place, buy a multifamily and occupy one of the units. This will allow you to have the 5% downpayment on an income property, and your payments will be made by the other tenants. Eventually when you move out or buy a house, this income property will remain in your portfolio and will now make more cashflow as you will rent out the unit that you once occupied.
Talk to a bank to find out how much they will let you borrow. You can go online and look at mortgage payment calculators to show you what mortgage payments will be. Go to realtor.ca to look at things like property taxes for listings you are interested in. On top of taxes you will have utilities (water, sewer, garbage, electricity, gas) and if you have a condo, there are condo fees.
As a first time buyer, you can get a house for as little as 5% down, so your $15K (assuming your fiancé is not putting any money in) MIGHT buy you something around $300K, BUT you need money for closing, inspection and there may be property purchase taxes in Manitoba. You also need to keep some money aside for unexpected repairs.
What other debt to you (and your fiancé) have? How much does she have saved and how much is she paying for rent (she won't be paying rent, so can help pay the mortgage)?
Investor · North Bay, Ontario · Member since 2019 · 221 posts · 99 votes
5y
@Ashar Ali RENT! Rent a place you can comfortably afford for now. Once you are ready to buy a place, buy a multifamily and occupy one of the units. This will allow you to have the 5% downpayment on an income property, and your payments will be made by the other tenants. Eventually when you move out or buy a house, this income property will remain in your portfolio and will now make more cashflow as you will rent out the unit that you once occupied.
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
5y
If you're going to buy, make sure you either A) plan to house-hack or b) purchase a property that would serve as a profitable rental after you move out or c) purchase a property you plan on staying in for 5 or more years.
Rental Property Investor · Edmonton, Alberta · Member since 2015 · 307 posts · 200 votes
5y
If you buy right, it should cost you less (per month) to own your own home. That's why people go into the business of buying homes and having people rent them - there's profit to be made! Plus the mortgage that is being paid down is your equity, not your landlords.
@Theresa Harris According to realtor.ca if I go for a property worth 170,000 with a 5% downpayment and rate of interest 2.5% for 25 years, it gives me a monthly expense of $1178. I also called up a mortgage broker and found that I can get $200,000 easy. My credit score is 781 and annual salary before taxes is $85,000. No debts
I will not be asking for any rent or money from my fiance for at least a year. She cannot work in Canada, yet.
@Melanie Dupuis I follow you on instagram you know :) Your social media team is doing a good job (replying to forum comments and everything)
I was looking at this idea of buying multifamily house and everything you said. It's just that in Winnipeg, whenever I go to realtor.ca, i donot see any good, cheap multi family house. The ones that look ok mathematically, are not in a good neighbourhood. Not sure how to get a decent multi family property.
Investor · North Bay, Ontario · Member since 2019 · 221 posts · 99 votes
5y
Hey @Ashar Ali, thanks for following us on IG! This is not our team responding to your question! It's Mel & Dave, and I hope you take my advice given in the previous post.
Investor · Edmonton, Alberta · Member since 2018 · 47 posts · 22 votes
5y
@Ashar Ali If you rent your costs are fixed and you won’t take on the liability of any expensive repairs. If you buy you will have the added costs of utilities, maintenance, taxes , etc. I have found that typically homeownership will cost about 1.5 to 2 times your mortgage payment in expenses (depending on your area). That’s why I laugh when I hear ads that say for the price of rent you can get a mortgage (doesn’t factor in the additional costs). Don’t end up house poor by accident. I agree with Melanie. Rent or house hack a multi unit. Know your numbers and costs before jumping into anything. Best of luck.