Although I often speak about multi-family properties from the perspective of an investor or landlord, I am currently working with 2 separate clients who have a different reason for seeking these properties. These clients are also looking at creative solutions, that don’t involve becoming a landlord, but that have many upsides none-the-less.
With both the high cost of Toronto real estate and tightened lender criteria, many are finding it hard to get into the market or move up within it. These factors (high housing prices pushing the bounds of affordability, along with challenges in finding the right home in the right price point and/or location) are causing homebuyers to seek a new (old) solution. My new clients are looking to buy homes with their family or friends!
The intention is for all generations to live under the same roof; or one family to live in one unit, while a friend lives in the other!
My wife quite liked the idea, and now we too are considering a large building which will house our family and my sister-inlaw’s
As far as multi-generational living goes, there is a lot of upside. We like the idea of having our family close and integrating them into our son’s life; but it also makes great financial sense.
If parents, or in our case other family members, are involved in the purchase, the purchasing power is expanded (by increasing the down payment and extending the financing qualification), raising the odds of you finding a suitable home and enabling you to access more desirable locations.
The added bonus of having family/friends/parents close by, can be that they help with another major cost: childcare. In our family’s case, we can look after each other’s little ones from time to time.
in the case of co-purchasing with parents, of course, there is the peace of mind that as they age, they‘ll know that you Are close by, and able to support them as their health and lifestyle adjust.
One challenge with this approach is finding a property that suits everyone. You will need to all get on the same page with regards to what you are shopping for at the outset. Or else you may find it more challenging, or realize that suitable properties are either the wrong style/design, lack certain elements (EG. Parking), or are in the wrong location (potentially too far away from schools, friends, etc.)
In addition to the usual features that homebuyers seek in a home (i.e. proximity to amenities, storage, thoughtful layout, etc. etc). Multi-generational buyers ( or co-buyers who are family or friends) may have other, more specific criteria that may require special consideration. For example, homes must be spacious enough and laid out appropriately to accommodate all family members – or the dwelling needs to have the potential for specific renovations that could create living space and accommodate more spaces as families grow.
There are so many considerations to include when considering a purchase like this. We recommend that you and your co-buyer(s) sit and have an open, honest conversation (maybe over wine!) to address all of the “must haves”, “can’t haves”, and other logistics.
Better yet, reach out to us so we can help craft the communication, since we are becoming very familiar with all of the critical considerations. We’ll even bring the wine!