Second-time homebuyers face a unique set of challenges – a lack of government driven incentives, a larger mortgage, and increased housing expenses, to name a few. And with markets across the country continuing their upward climb, it can be more difficult than ever to find a dream home that you can grow into. That being said, it’s not impossible – but you may have to alter your thinking a bit.
1. Be strategic.
If you’re going to play the property game, it’s best to play it smart. That means being strategic, so that you can get the greatest return on your investment and skip a few rungs on the property ladder on your way up. A little bit of sacrifice today – like living in an up-and-coming area, buying a fixer-upper or renting out your basement – can do wonders for your investment down the road.
2. Be smart.
Buy as much house as you can afford – by scrimping, saving and sacrificing – but don’t stretch yourself too thin. Stress-test your finances by making sure you can afford the 5-year posted rate on your desired home’s price tag, and make sure your budget can handle a 2 or 3 percent increase in expenses – just in case property taxes, utility bills or maintenance costs go up. Also, don’t forget to factor in additional expenses – such as a second car – that you may have to incur while living in your newer (and larger) home.
The government was willing to give you a break when you bought your first home – drastically reducing the amount you had to pay for GST/HST, Land Transfer Taxes and allowing you to take advantage of the First Time Homebuyers Plan. The second time around, you won’t be so lucky. So make sure you budget accordingly.