Future Needs and First Time Home Buyers
By Realtor, Geraldine Santiago
Planning ahead is important for anyone purchasing real estate and most especially for first time home buyers. It is recommended to think about your future needs as well as long-term needs before you acquire your first home. Reviewing all your real estate options not just for now, but for the future, is critical.
First time home buyers usually start with buying a modest studio or one-bedroom condo because the jump in price from a studio or one-bedroom to a two-bedroom condo is something they cannot afford. In addition, most likely, their present needs only require a small studio or one-bedroom unit.
When you think of your future needs in real estate, try to think of your needs at least three to five years down the road. Typically, studio and one-bedroom apartment units allow for a maximum occupancy of up to two people. This means that if you intend to marry and have a children within the three to five years, clearly, a studio or one-bedroom will not be adequate for your future needs and you will be forced to sell your apartment.
This might be easy enough to do-- after all, you will be moving up in terms of real estate, right? But did you consider costs of selling real estate? The years you have saved in equity might just go to costs for selling your apartment. Some of the costs include, but are not limited to the following: real estate agent’s commissions, move in/out fees for strata titled properties, moving fees, lawyer/notary fees, GST for services rendered, mortgage penalties for early discharge, property purchase transfer tax which will no longer be exempt as you are now not a first time home buyer.
A two-bedroom apartment allows you to have the flexibility to grow into the apartment. In the meantime, you may want to rent out the second bedroom, which will help you with your added mortgage payments.
My suggestion is to think about your future and long term real estate needs and review all your options before buying your first home.
Good luck! I hope this helps!
Geraldine Santiago is a RE/MAX Realtor® licensed in both residential and commercial real estate services, specializing in land assembly projects and land acquisition.She is a published author of three real estate reference books for Self-Counsel Press Ltd. namely the "Complete Home Buyer's Guide for Canadians", "Selling Your Home I Canada" and "Buy and Sell a Recreational Property in Canada" and her recently self-published ebook "How to Band Together with Neighbours in Land Assembly", 2018. She is known for seminars on real estate trends in buying and selling in metro Vancouver.