Buying your first property in your thirties can seem like an insurmountable challenge, especially with the rise in real estate prices. Yet, with smart planning in your twenties, this dream is completely achievable.
How do I get there? 🤔 Here’s a practical guide to becoming a homeowner in your thirties:
The secret to success: start early
The goal isn’t to deprive yourself your whole life, but rather to develop smart strategies to achieve your dreams. 🎯
Are you 18 or in your twenties? Start setting aside $20 (or an amount that seems realistic to you) per week. That’s not a lot, but it’s a great start. Time is your best ally in this adventure.
Maximize your savings by cohabiting
If it’s an option, living with roommates or staying with your parents for as long as possible can save you thousands of dollars annually. Housing is the biggest expense, so if you can do it, jump on the opportunity. For some, this is a big sacrifice, but consider this period as an investment in your future.
Create and stick to your budget
A budget isn’t a constraint, but your roadmap to reaching your goal.
By setting a realistic budget and eliminating unnecessary expenses, you’ll be able to set aside several thousand dollars. However, it’s important to treat yourself from time to time and enjoy the fruits of your hard work.
The advantage of starting young? You significantly reduce financial stress and give yourself more options when it’s time to buy.
Adopt good saving habits
One of the keys to saving significant amounts of money is to resist the temptation of impulsive (unnecessary) and luxury purchases. Before every purchase, ask yourself this question: “Do I really need it, or do I just want it?”
You can also adopt many behaviors that will help you save more quickly.
Open an FHSA as soon as possible
The FHSA is a tax-free savings account created by the federal government to encourage and facilitate homeownership for first-time buyers. Annual contributions to the account are capped at $8,000, with a lifetime contribution limit of $40,000. Furthermore, the account has a 15-year term from its opening date.
The benefits of the FHSA:
- Your contributions are deductible on your income and benefit return;
- Your savings grow tax-free;
- Your withdrawals for a first home purchase will not be taxable;
- If you want to use the funds for something other than a property purchase, you can transfer them to an RRSP, RRIF, or TFSA without affecting your contribution limit or incurring a penalty;
- Unused contribution room from one year can be carried forward to the following year up to a maximum of $8,000.
👉🏻 To learn more, read our article How can you finance your real estate dream?
Plan like a pro
Good planning starts with informing yourself about the real estate market, the buying process, and all the associated costs. When you know what to expect, it becomes easier to plan your savings based on the actual costs.
💰 Here’s a breakdown of the expenses associated with buying a house:
- Down payment: 5% to 20% of the purchase price
- Inspection fees: $500 to $1,000
- Notary fees: $1,000 to $2,000
- Real estate transfer tax
- Moving costs
- Emergency fund for unforeseen repairs
- Renovation costs
- Home insurance
- Annual fees
👉🏻 To learn more, read our article 10 costs to consider when buying a home.
Become a personal finance expert
Ignorance is expensive. To avoid this, surround yourself with experts, like a financial planner.
By the way, quickly educate yourself on personal finance. The more you understand how savings, investments, and credit work, the more informed your decisions will be.
Inform yourself about:
- How to create a budget.
- The different types of savings, like the TFSA, RRSP, and FHSA.
- The importance of saving and how to invest your money well.
- Taxes and their impact on your financial situation.
- The importance of a good credit score.
- How to choose your credit card wisely.
- What debt-service ratios are.
Make compromises on the first house
Buying a house necessarily involves compromises. Prioritize your needs even before you start your search. What matters most to you: location, property type, space, privacy, or proximity to public transportation? You have to be realistic in your expectations and be prepared to adjust your criteria according to your budget.
Is it possible to buy a property in your thirties? Yes. It’s the result of smart planning, calculated sacrifices, and a lot of perseverance and discipline. By adopting these strategies in your twenties, you’re giving yourself every chance to succeed. We guarantee you: the effort is well worth it!
✅ Curious to learn more? Get expert advice from a professional who is experienced and regulated by the real estate brokerage act by contacting one of them now!