How to Become a Homeowner on a First-Time Buyer’s Budget
It's not easy being a first-time home buyer right now. At the end of last year, housing affordability hit an all-time low.1 Additionally, mortgage rates have risen significantly since 2021, while inventory remains tight for many property categories, but especially for starter homes. Even lower-priced condos are harder to snag these days, as investors and downsizers muscle out first-timers by offering stronger, often cash-heavy bids.2
As a result, many first-time home buyers are finding that they need to get creative to afford a home or risk renting for longer than they planned. If you, too, are struggling to afford homeownership, here are some workarounds to consider as you plot your first home purchase.
1. Try House Hacking
“House hacking” is a real estate investment strategy in which participants use their homes to generate income in order to offset their expenditures.
For example, renting out a basement apartment or accessory dwelling unit (ADU)—such as a detached garage that's been outfitted with a washroom and small kitchen—counts as house hacking. So does splitting housing costs with a roommate or converting a part of your home into an Airbnb.
House hacking isn’t new. But, it’s grown in popularity as a new crop of digital platforms has entered the market and made it easier than ever for homeowners to generate income from their property.
In some cases, house hacking may make it possible for you to qualify for and afford your first home. A lender, for example, may approve you for a larger mortgage if you purchase a home with immediate income potential, such as a legal duplex or a property with a secondary suite that has a kitchen and full washroom.3
In addition, house hacking could help you pay your mortgage once you move in. Here are just a few of the ways you could use your home to earn some extra cash if your neighbourhood or municipality allows it: