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Why first-time home buyers should still buy real estate. Advice on how they can get more bang for their buck. The importance of having a basement apartment. Why having a real estate lawyer, mortgage broker & home inspector as part of your team is important   Transcript Davelle M.:        Welcome. Thanks for listening … You are listening to The Morrison Report, real estate insights for Toronto. So today what I really wanted to talk about is those first time home buyers and what a hard time they’re having in the market place right now, given the price point of where things are sitting right now in the city of Toronto. And obviously its great for current homeowners, that we’ve obviously made a great amount of money on our real estate at the moment, but it’s very difficult for first time home buyers to get in the market. So let’s go over a couple of things about what they need to know and why should they still consider getting involved in the real estate market. I mean really, maybe they should just keep renting, because renting is easier and the markets are difficult. Well, for me, it’s all about: Why buy real estate? And I would say you have to buy real estate because number one, we all know the market is changing, but the mortgage rates are at an all time low right now. When you purchase a property it really acts as a forced savings and it really helps you to build equity in the long run. You know I always say to people, “Imagine being retired 60-65 and still having to pay rent.” What I love about owning real estate, and why I think it’s really important for first time home buyers to get into the market, is because at some point when they retire this way they will own their own home, their mortgage will be paid off, and they will have a place to live rent free, which I think is really important. You know, sure, you can say it’s great to be renters, it’s very cheap right now, but for a lot of renters, they have to keep moving around because their landlords want to sell the properties that they are currently living in. So they don’t end up staying there forever and it’s this constant shifting and moving around. You never really have a place to call home. One thing I love about owning real estate is that it actually does act as a forced savings plan. I always read in the media, and people say “Oh, you know, you could just save money instead, you could pay rent and save the balance in, whatever, your RRSP, or some sort of investment account.” But that’s not really realistic for the average person. For me, and I think for most other real people, we just need the for savings. If you’ve got the mortgage payment, you know that a good chunk of that money is actually going to be going towards paying yourself first, and not paying off your landlord. The challenge with having a landlord, of course, as much as I love being a landlord myself, is that you’re paying somebody else’s mortgage. And wouldn’t it be nice to pay your mortgage off first? I think that’s one of the really important things about building a nest egg for yourself. I think also, owning real estate is one of the fastest ways to achieve wealth. My accountant always says to me, you know, he’s looked at people’s books over the last 30-40 years and he can really, truly see, that the big difference in those that are doing well and those who are not doing well is those who own real estate. And he can see, over time, that owning real estate has really helped build their portfolio. There’s no capital gains tax on primary residence, so if you do own your own home, and you choose to sell, and it’s made a quite a bit of money, as a lot of the houses have in the Toronto marketplace right now, at least you get to keep that money tax free, which is another huge advantage to owning real estate. Also, the values, as we’ve seen in the city, again, have kept increasing and increasing, you’re almost looking at people doubling the worth of their property every six or seven years. And for a lot of people in this city, I think they’re really seeing that their house actually is making more money on an annual basis than they are in their regular jobs. Where can you earn that kind of return, but in real estate? The other great thing about purchasing real estate is that you don’t have to use all of your own money, because the banks will loan you up to 95% of the value of the home. So, again, it’s a great way to get into the market because you don’t actually have to play with all of your own money to get into the market in the first place. So those are some of my reasons why I say it’s very important for first time home buyers to get into the market, and also it’s a place to call home. It’s a place where you can hang your hat, and paint, and do renovations. And a place where you can start a family, or have friends and family over. So I think it’s a really good important thing and I think it really does sort of help you to build that root base, that you know you’ve got a place to call home and a place you’re going to stay. So if we look at the average prices in Toronto, they have definitely skyrocketed over the last couple of years, and in particularly this year, for sure. We are looking at well over semi-detached houses and detached houses, for the most part, being worth over a million dollars