Seven reasons to let renters help pay your mortgage

Are you buying your first home in Toronto or the GTA?  Consider properties that would allow you to have a rental apartment.  Those renters help pay your mortgage. CMHC announced that when qualifying for a mortgage, you could now include 100% of the income from a legal secondary unit(s). Typically it’s as little as 50%, so now it’s easier to qualify.  Even if you don’t need the extra income to qualify for the mortgage, it’s an option worth considering.  Here’s why.

Even existing homeowners can benefit from adding a renter

Whether you’re a first-time homebuyer feeling your way into the housing market or an existing one looking to lower your costs of home ownership, here are the benefits of having renters help pay your mortgage:

Seven reasons to consider having renters help you with your mortgage costs:

Reason # 1 – you can only afford a condo on your income.

If you’re a first-time buyer in Toronto, and prefer to move directly into a semi or detached home, adding a rental suite can help you afford “more home”. You might be able to qualify for a higher mortgage with the rental unit, instead of purchasing a condo at a lower cost.

Reason # 2 – you want to avoid being “house poor”.

If you want to get your foot into the world of real estate without breaking the bank, a home with a rental suite can be a great start. Especially if the area you happen to love is pricy.

Reason # 3 – you don’t want all your financial eggs in one basket.

You want to lower your mortgage cost so you can channel money into other investments like RRSPs, TFSAs, and RESPs.

Reason # 4 – you hate carrying debt.

If you consider your home to be your main savings or investment vehicle, a renter can help you with getting that mortgage paid off sooner. And, owning your home free and clear much faster.

Reason # 5 – you want to be able to “live”, not just pay a mortgage.

Spending less on your mortgage can give you the freedom to change your lifestyle or follow your dreams. Perhaps you can travel, start a new business venture, or be a stay-at-home parent.

Reason # 6 – you want to be able to afford to invest in more real estate.

Having additional income in the form of a rental unit (or more than one) can help you afford to buy another property purely for investment purposes.  And renters can cover the mortgage on that one for you, as well!

Reason # 7 – you want to offer affordable housing to people who can’t afford to buy their own home yet.

According to CMHC research, the vacancy rate in Toronto in the fall of 2015 was at 1.6%, and there is a real need for more housing options for people in our city.  Offering them a rental unit in your home can be a “win” for both of you.

Want to explore this option?  Check out my articles under the “Investing” tab above.  For other ideas on getting your mortgage paid down super-fast, check out my posts on how to eke out extra mortgage payments wherever possible, here.

And always feel free to get in touch with me to discuss your goals in more detail – I’m happy to help.

Photo [c] Benis Arapovic for vecteezy.com