As home prices skyrocket in Canada, particularly in Toronto and other high demand locations, an undersupply of readily available homes hitting the market is driving prices up even more. Bidding wars are common, driving up the average selling price of a home significantly.
Here’s the thing, people are sick of renting and want to begin investing in their first homes. A recent survey put out by Bank of Montreal (BMO) shows that 60 percent of millennials who are renting are sick of it, yet many (70 percent of millennials surveyed) are still putting off their first purchase over varying concerns.
What’s a person who wants to get into the housing market to do, particularly when they don’t want to rent, but can’t secure an adequate down payment on their own? People who already have roommates or close friends or family who are interested in getting their first home are teaming up to purchase their first home together. A recent RBC poll discovered that one in four millennials would consider purchasing a home along with a friend, this number has increased by over 10 percent from last year.
Considering buying a house with some family or friends to help with the financial load? Here are 10 areas to explore before you consider moving in with anyone, period.
1. What is your five year plan? Is this going to be a one year, two year, or five year living arrangement? How often will you meet to re-evaluate and decide when it’s time to move, give notice, sell, or move on?
2. What is everyone’s living habits? Do you/ will you watch a lot of TV in common space? What are your usual working and sleeping hours? What about exercise, loud music or the person who’s never at home?
3. How does everyone feel about guests? What about the friend who hangs out every night, significant others or out of town visitors?
4. What will you do about collections for bill payments? If you already live together discuss what has worked in the past and what hasn’t, now’s the time to clear the air.
5. How will you maintain common space, like sinks in dishes and other regular cleaning schedules?
6. Would you consider dividing a larger house into floors or separate apartments for a greater amount of privacy?
7. Who controls the thermostat? It may sound silly, but heat costs money. Figure out rules as to when you turn on the AC and when you crank up the heat. This will avoid future disagreements.
8. What are everyone’s skills? Are you going to complete repairs yourselves, or hire people? How will you decide on upgrades, renovations and divide up fees for repairs? If you’re renting who’s going to call the landlord?
9. How will you determine how the place is decorated? Or who gets their first choice on master bedroom?
10. Will you all be willing to sign on the dotted line about any agreed upon terms and conditions? If not this could be a major red flag for problems ahead.