My wife and I recently got pregnant and our Real-Estate goals changed rather quickly!
At the time, we were living in a very nice 2-bedroom 856sqft condominium in the Yonge and Eglinton area. With me being in Real Estate, I needed a home office and we soon realized that 856sq feet was not enough for a growing family. We started looking around at houses in the area (Yonge and Eglinton) but we knew that we would have to pay 700k for a fixer upper or 900k+ for something renovated.
Our monthly cost would have been extremely high and we were nervous about that especially with a new baby on the way! I have already purchased a couple investment properties in the past and my father owns a number of them, so I had some experience. I started looking at multi-unit homes with a unit that would be big enough for our new family. When I started looking at the numbers, I discovered that we could in fact stretch our purchasing power because of the rental income we would be collecting.
The rental income would enable us to get a property in the areas we wanted while keeping our expenses even less than if we were to purchase a single family home. Granted, we have had to sacrifice some space i.e. basement, third bedroom, backyard and garage (you may not have to sacrifice the backyard and garage if your unit is on the main floor). The unit we moved into is a two bedrooms + den with a nice sized balcony off the kitchen. We love our place and the lower expenses and investment potential was well worth the small sacrifice for our future gains!
Classifying a multi-unit property can be a little confusing. A lot of it depends on how they are financed or viewed by the lenders. Recently the banks changed how the financing works and will only finance homes with four units or less with residential interest rates (it used to be six or less). Now, anything over 4 units is classified as multi-unit commercial and financed with commercial rates.
Here is an example of the home we purchased followed by an example of a single family home in the leslieville area of Toronto.
Down Payment 10%
Total Cash Required For: Deposit, Down Payment + Closing Costs