High costs drive B.C. first-time homebuyers to seek home with rental unit
The cost of buying and owning a home in British Columbia is so high that about half of first-time-homebuyers are looking for a property with a rental unit to cut costs, according to a new survey.
The strong interest is likely a reaction to the average price for a home in Vancouver, which is up 25.7% year-over-year to reach $831,555.
Some 56% of residents in the province are looking for a home with a rental unit, according to the 2011 TD Canada Trust First Time Homebuyers Report.
"Taking in a tenant can be an effective way to supplement your income and pay off your mortgage faster," said Barry Rathburn, manager of residential mortgages for TD Canada Trust.
A vast majority, about 85% of first homebuyers in the survey, think a rental unit will generate $500 to $1,000 a month, and 67% said the extra income will go towards paying their mortgage.
The report showed B.C. first-time homebuyers have also been saving longer - 57% have been saving for three years or more, compared to 47% nationally. A greater number of B.C. first-time homebuyers need a mortgage for their purchase as well - 93% versus 87% nationally.
Rathburn suggested those first-time homebuyers considering a home with a rental unit choose a mortgage with flexible options.
"These products allow you to pay more towards your mortgage when you can afford to and give you the peace of mind of knowing that if something changed financially (for instance, your tenant moved out during the same month that your furnace broke down), you could miss payments with no penalty," he said.