Co-ownership and rentals: Budget-conscious alternatives

Agents can guide hopeful home owners to these possibilities, especially in red-hot markets

Co-ownership and rentals: Budget-conscious alternatives
With Canadian housing prices reaching record heights this year, more and more millennials are trying out previously downplayed—but no less viable, as it turns out—alternatives to home ownership.
Among these options, especially prominent in red-hot Toronto, is cooperative purchases of homes between friends or relatives, The Canadian Press reported.
In its recent survey, RBC noted that co-ownership is a top choice among 24 per cent of millennials. HomeLife/Realty One Ltd. (Toronto) sales representative Alan Aronson said that a leading reason is that each of the buyers in a co-purchase can qualify for a larger mortgage, while sharing the remaining costs (such as land transfer taxes and insurance) among themselves.
However, Aronson warned that this route has its own share of risks, especially considering that relationships can and do become strained when it comes to money. For instance, if one party neglects their fiscal responsibilities, all the co-owners might be forced to sell the property early or might even lose it to the lenders.
Another option would be to rent, probably in perpetuity. Jason Heath of Objective Financial Partners said that this might indeed be the better choice in the most expensive markets, if one is willing to “ignore the practical and psychological benefits of home ownership.”
Instead of using one’s funds for down payment, one can instead invest it—and in the process avoid other, not initially obvious, expenses such as taxes and closing fees.

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