Hi BP Community in Canada,
I am currently residing in Brampton and in my second primary residence (moved from a stacked town to a town). I wanted to ask what strategies you may have used to move up in your primary residence homes for instance buying a condo to a 4000 sq. ft detached home instead of just saving money up to spend it on a large house and never moving for years. If you can provide details on cities, mortgage products, resale / preconstruction properties, years it took, etc. I would love to learn from your strategies that have worked for you.
Updated 29 days ago
Correction to my post: I meant to say small moves for instance from a condo to a town to a semi detached to a small detached, etc.
@Ramanjeet K. welcome to BP. I would suggest that most investors put their money into investment real estate, not into making their primary house larger. If your house isn't generating a return (appreciation doesn't count as it isn't guaranteed), it's a liability that you dump money into (see Rich Dad Poor Dad).
Move up in steps. A condo to a 4000 sq ft house (that's a large home) is a big step. Most would go from a condo to a starter home, then move up in 5-7 years to a larger home. If it is your primary residence, you can get into it with a lower down payment (you pay for it with CMHC insurance). Do a quick calculation, but if there are condo fees for your condo/townhouse figure out the costs for a house that costs more. You'll find with the low interest rates and higher condo fees, the condor fees could be paying for a higher mortgage on a home with no condo fees.
If your goal is a massive primary residence first buy enough cash flowing investment properties to afford it. I would suggest you target a purchase price under $1M unless you enjoy subsidizing whatever friends out fed gov is funnelling money to this week.
Originally posted by :
I apologize for not stating this clearly, I meant to say moving up in steps for instance from a condo to a condo townhouse to a small detached home, etc. Thank you for your advice @Theresa Harris
Then I would go from a condo to something without condo fees. Ideally something with a rental suite, but that may not be realistic in all markets. After the smaller house, then move up. If you also have a rental property where tenants are essentially paying down the mortgage, that can also help build equity and help you get ahead.
I would recommend you consider house hacking. That means you buy a duplex or triplex or even a Single Family home that you can duplex. You live in one unit and then rent out the rest of the units. The other rents pay for all of your overhead and you live for free. This helps you get the investment property and a home for you.
Then as your income and equity grow, you move out to your own single-family home.
Hi @Ramanjeet K. I believe you're asking about the strategy and timeline. Here's a simplified version of a process that I have used somewhat and hope to continue with. Use the 5 year mortgage term as a guide to move up or increase your investments.
1. Started with a condo, at the end of the 5 years term, refinanced and bought a townhouse.
2. Rented out the condo and moved into the townhouse. Renovated and Refinanced the townhouse over the 5 years mortgage term and bought a detached house.
3. Rented out the townhouse and moved into the detached house. Renovated and added a basement suite to the detached. In 5 years term I hope to refinance and buy another place.
15 years 3 properties, you always go back and refinance the the condo and townhouse again to purchase more investment properties and increase your holdings.
Hope this helps,
Thank you for the detailed steps @M Thomas . Yes, I was hoping to understand strategy and timeline and your answer is very insightful. This is a great strategy of refinancing over 15 years to move into a detached home but at the same time purchase investment properties. I appreciate it.