How did you save up for your House / Condo?

[Ogata]

With the rising prices of houses / condos. I just did a calculation and to reach that magical 20% down payment, I have to wait 20 years based on my annual salary. HOLY F@#$%$%$#%#$% thats a long time. I regret not saving up those 20 years ago now. Right now I'm so frustrated at how impossible to get even a 280,000 place. Even with a 30-40k salary, it is impossible unless I am missing something.Thoughts / Opinions? Monthly Expenses, I don't save much and in process of cutting back on things.

[vinamack]

Top gear top tip. Get a second income. Aka a significant other. Helps a lot!

[Jackal]

Top gear top tip. Get a second income. Aka a significant other. Helps a lot!

Good tips plus these:
1) Also max out your RRSPs every (or as much as you can put down) then use it as a downpayment when you have enough. Pay back over 15 years.
2) live at your parents rent free for a while and create a TFSA and buy GICs and do #1 (regular automatic withdrawals)
3) for the most part this is true - it's not how much you make, it's how much you save

[Default User]

I quit gambling and drinking for a year. Then our parents gave a bit. We didn't hit 20% so we had to go w/ CMHC considering we were first time home buyers.

But from other experiences, here's a few tips that don't necessarily help you save money for a down, but help you get a place and use it as a stepping stone

Purchase a smaller, less expensive home/condo as a stepping stone. It'll be easier to save $20G's than it is to save $40.

Use the equity it accumulates in a few years as a chance to move up to a bigger and better place. Hopefully the property value earns you $10G in 5 years.

Purchase outside of Toronto. Pickering, Ajax, Whitby is booming which means property values are sky-rocketing. Which means free money to those that know how to use it. Stouffville is also a good bet. (My brother purchased a house in Ajax for $260G. He sold it for $380 5 years later.)

If you need a place ASAP, consider an area such as Malvern, Flemingdon park, etc. Property's in these areas move quickly (probably because ppl are scared livin in the areas LOL) Market prices are very low in these neighborhoods and would have no problems selling it quickly. If you find a fixer-upper, and throw in some elbow grease, you could probably make some money on it too

[JaYson]

biggest thing is saving and lowering your expenses:

1) figure out how much you need: 60K for a $300,000 home, 40K for a $20,000 home

2) figure out how much you make/how much you can afford to put aside, budget yourself and lower your total expenses every month.

you'd be surprised how much you can save over a year for example, if you make 40K a year you're bi-weekly paycheque will likely be somewhere in the range of $1200.00 after taxes:

if you can put away $800 of every paycheque ($400/month for other expenses) you'll be able to save $20,800.00 over the course of 1 year.
or
if you put away $600.00 ($600/month for other expenses) you'll save $15,600 over the course of 1 year.

both these scenarios do not include INTEREST

3) making your money work for you: by putting your money in a TFSA, all the interest income you earn while in that account will be Tax Free, meaning the income you earn while the money is in the account will not be added to your "income" or be counted as "capital gains", therefore it wont increase the amount of money you pay in income tax at the end of the year. (up to $5000 contribution/year)

alternatively, you could put your money into a TFSA RRSP, this has multiple benefits, the income earned through interest of gains (if you've got a mutual fund RRSP) also will not be taxed and count towards additional income or capital gains, more importantly (possibly) is that by putting your money into an RRSP of any type, your money becomes "tax Deferred" thus if you are on the lower range of a tax bracket, (making just over $41,544.00) you could put enough money into an RRSP which will effectively lower your total "income" for the year and bring you down to the lower tax bracket, thus you'll pay 20.05% in income tax, vs 24.15% if you were earning above $41,544.00 and did not contribute the money to lower yourself below this income bracket.

also, with the RRSP you can use the First Time Home Buyers Plan to take out up to $25,000 from your RRSP, tax free, to put towards your first home. the balance must be repaid within 15years (i think). keep in mind also, normally what happens when you take money out of your RRSP, you'll have to pay Income tax on the amount, b/c its TAX DEFERRED, meaning you forgo paying tax on that income while the money is going in and defer it until you take the money out.

be careful what type of RRSP you get, for example if you get a TFSA RRSP based on mutual funds, these some inherent risk due to the fact that its based on mutual funds, which could fluctuate. however you could put it into guaranteed things like savings accounts or GICs, or certain bonds, which will guarantee your principal amount, and some fixed amount of interest income.


4) make regular contributions to your account, as opposed to waiting till the end of the month to make your contribution, make regular contributions weekly, or with every pay cheque, this benefits those with savings accounts though compounding interest. if you put a lump sum of $1600 at the end of every month you'll earn X amount of interest, however if you put in $800 mid month, then the other $800 at the end of the month, you'll earn (additionally) interest for half a month on the $800


basically figure out what you NEED, Ie. the total cost of a house you're willing to buy/realistically can buy. from there determine your downpaymen amount, from there, determine how many years you have until you realistically need/want to be in the position to buy a house, then divide that buy th enumber of paycheques you'll receive by then. that'll give you a figure of how much you need to save per pay cheque from here on, try to stay within that budget, put the money away every pay cheque so you cant spend it.

put the money into some vehicle which will protect your principal investment (atleast to the best extent possible) and will offer you the best return on interest. more importantly will make your money work for you ie. RRSP or TFSA, not in a sock under your bed lol

goodluck!!!!!! hope this all makes some sense, kind of just woke up and started typing off the top of my head