Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

Residential Buy- and Sell-back Agreements: a new option for Boomers?

Posted By Financial Independence Hub | November 19, 2016

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

In today’s real estate market, buying a house is less a traditional rite of passage and more a Herculean feat, especially for Millennials scraping together a down payment in Toronto or Vancouver. To them, the concept of owning a detached dwelling, complete with yard and picket fence, is a faded – and financially unfeasible – memory.

But it was a reality for Canada’s 9.6 million Baby Boomers, many of whom bought in their early 20s, and are still living in the family home. And, given the explosive surge of housing prices over the decades, a fair share of those Boomers have seen their investment grow by hundreds of thousands of dollars. Consider this – according to the Toronto Real Estate Board, the average Toronto home sale price was $75,694 in 1980, compared to September 2016’s average of $755,755 – an 898% increase!

These homeowners face a choice: sell while the market is hot (especially as new mortgage rules designed to cool demand go into effect), or stay put. For many, it’s not an easy decision. They may feel cashing out isn’t worth parting with the beloved family abode. Others may wish to sell, but dread navigating bidding wars and other competitive tactics when buying their next home. For some, “downsizing” may just be a dirty word. So, what options do these Boomers have?

Sell and Lease-back agreements offer an option

To address this conundrum, some seniors have turned to what is traditionally a commercial real estate practice: buy- and sell-back agreements. In these transactions, a home is sold to an investor buyer while the previous owner continues to live in it as a leased tenant. It’s a method growing in popularity, and can seem the best of both worlds, but it certainly comes with its pros and cons. Here’s what Boomers should keep in mind if considering a sell and lease-back agreement:

Pro: It’s attractive for Investors

Considering a Sale Leaseback on a principal residence

Posted By Michael Drak | November 18, 2016

This idea came to me while away fishing and the more I think about it the more appealing it becomes.

Sale leasebacks are common in the commercial property arena but I can’t recall seeing it discussed with respect to residential property. I googled “sale leaseback residential property” and was pleasantly surprised to find that some people are already doing it.

Based on what I know, and my own particular situation, here is how it should work in theory. My wife the Contessa would like to live downtown by the waterfront in Toronto one day. Austin is our only son still living with us, with our other two boys somehow managing to escape. So when Austin eventually, leaves the house will be largely empty. There is a good chance that Austin will move into residence in downtown Toronto when he goes to university in three years.

My mother, who is 92, is in a nursing home close to my house and I wouldn’t consider moving while she is there. Why move, complicate my life further and create unnecessary pressure?

My idea is to sell in the spring if residential real estate prices stay high and the market stays hot. I would negotiate a minimum five-year lease, which will allow me ample time to simplify and de-cumulate, getting rid of a lot surplus stuff accumulated over the years.

My Options

Are you taking Rate Comparison seriously enough?

Posted By Financial Independence Hub | November 2, 2016

By Sean Cooper

Special to the Financial Independence Hub

For many Canadians, shopping is a national pastime. Some of our favourite activities include planning a vacation and picking up new furniture – unfortunately, shopping for a mortgage and auto insurance doesn’t seem to be one of them, finds a recent Ipsos survey commissioned by LowestRates.ca.

For most of us, buying a home is the single biggest financial decision of our lifetime. It shouldn’t come as a surprise then that 67% of Canadian mortgage holders consider taking a mortgage a “very important” financial decision. Yet, what comes as a shocker is how little time we’re spending shopping for mortgages. We’re spending an average of 7.75 hours planning a $2,000 vacation, yet we’re only spending 5.75 hours (2 hours less) finding a $300,000 to $500,000 mortgage. I discuss these surprising findings and more in my upcoming book, Burn Your Mortgage.

The survey findings aren’t any different for auto insurance. While 52% of us believe auto insurance is a “very important” financial decision, we’re spending more time picking furniture and choosing a paint colour than auto insurance. Based on these findings, it would seem many of us don’t have our financial priorities straight.

Take the time to shop for Mortgage and Auto Insurance

How the smart home can save you money on energy

Posted By Financial Independence Hub | October 7, 2016

By Dani Nicole

Special to the Financial Independence Hub

You know money doesn’t grow on trees, but did you know your efforts to live a greener lifestyle at home can save you money?

A great way to start is by managing your home’s energy consumption. At Home Improvement Leads, we’re always searching for innovative tech and frugal tips to conserve energy and boost savings. Here are a few of our favourites:

Make Your Home Smarter

We’ve come a long way from the first clunky cell phones. Now, you can control your home’s energy usage from your smartphone. We love innovative tech that makes our home routines more convenient — like smart thermostats. A popular homeowner favorite is the Nest, which actually learns your heating and cooling behaviors and implements an automatic schedule.

You can monitor everything right from your smartphone or tablet, which means you can turn the A/C or heat down when you’re going to be gone for a while, then crank it back up when you’re on your way home.

Smart outlets are great money-savers, too. Plugging appliances and electronics into smart outlets allows you to control everything from an app. Did you leave the iron on at home? No problem. It just takes a few clicks to turn everything off and give you peace of mind. These tech solutions are inexpensive when you think about how much money you can save on your monthly utility bills.

Double Up Your Window Panes

Affordable Housing: Is it worth it to “Drive until you Qualify”?

Posted By Financial Independence Hub | September 29, 2016

By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

It’s an affordable housing conundrum for many downtown city dwellers: is it worth it to trade the convenience of urban living for suburban sprawl? As Toronto real estate prices continue their ascent, the only affordable way to own a detached house seems to be packing up and moving beyond city borders.

Hence the term “drive until you qualify”: the practice of moving far away to a region where real estate is still affordable. Doing so often means assuming a long daily commute to and from a bedroom community to an urban business hub – and the need to drive to the nearest corner store just to pick up some milk.

An Urban Exodus

But logging more time behind the wheel doesn’t seem to be deterring buyers in the GTA; according to recent numbers, they’re heading to the burbs in droves.

Sales are soaring in the municipalities surrounding Toronto – 3,586 houses sold in the 905 region in August, up 24% from the previous year, according to the Toronto Real Estate Board (TREB). Townhouses are also in high demand, with 1,154 units sold. By contrast, a scant 863 houses and 357 townhomes sold within Toronto proper.

Condos were the only housing type that remained stronger in the city than on the outskirts: 1964 compared to 822 in the 905.

But is moving out of the city always an affordable decision for those looking to upgrade their real estate, or accommodate their growing families? There are a number of areas to consider.

You Won’t Escape the Bidding War

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