Toronto is not just an amazing city, but an amazing large city in all the Americas and the world. In North America, the greater Toronto area has been designated as the fastest-growing metropolitan area on the continent, after Chicago and New York.

Its amazingness comes from its nightlife, quality of life, culture, economics, and peacefulness. However, its amazingness is taking heavy blows in real estate, particularly housing. Prices of housing in Toronto have been rising sharply for the past 3 years and the situation is upsetting.

For Toronto’s millennials, the situation is becoming depressing because their generation has the lowest rate of homeownership, particularly in the United States and Canada. This is low in comparison to Gen Xers and Baby Boomers.

Now it seems that homeownership has become an option unrealistic for millennials. If we check its extent in brief detail, the mindset which was present 5 to 10 years ago was to rent an apartment in a large city for 1, 2 or 3 years, save some money and then buy either a condo or a house.

However, that few years’ rent plan has now turned into something of a 5, 10 and even a 15-year type. What’s worse is that the once realistic expectation of purchasing a condo or house in a large city like Toronto is not only slipping away but has also fallen further out of sight for many.

Homeownership is not a bad choice. In fact, it is a smart move, in financial and personal terms. Unfortunately, cities and homes in Canada have become unrealistically expensive and incomes of the average Canadian are not rising enough to match those prices.

The average annual income of a Canadian in Toronto is around $58,000 and the average one-bedroom condo in Toronto is around $550,000. Yes, it has crossed half a million dollars mark and if pricing controls aren’t implemented, then the matter will go out of hand.

For most millennials, the art and act of saving money are difficult. Combining the lifestyles of Canada’s 3 largest cities namely Toronto, Montreal and Vancouver with their prices makes spending a large part of a person’s income an unavoidable phenomenon. Millennials also like to travel overseas for vacations (or locally), shop online, purchase the latest technological gadgets, cars and the like.

Considering the unfortunate truth in the journey of homeownership, here are some ideas that can help millennials in owning a home.

1. Borrowing money from parents and family members

Problem is, everyone does not have access to this kind of option. But when it comes to homeownership and financing for a home, this is the topmost option. There are also different ways to make it work too.

Millennials can ask their parents or family members (or both) to gift them some money earlier, instead of waiting for funds from the inheritance. This helps because the prospective buyers can pay down their debts (student loans, credit card bills, etc.). Parents’ financial assistance can help reduce the size of the mortgage and can save them interest each year.

The parents of prospective buyers can purchase either the condo or the home themselves, then place the buyers’ name on the property title. Not only will this give the millennial buyers an easier time with a mortgage approval, but the parents have improved credit. Plus, they can pay their parents back on the mortgage.

If you, as a millennial and a prospective buyer of home happen to be quite rich and can buy a condo outright on cash, then that is a great move. Investing the money smartly in real estate is not just the wisest financial consideration but also the best investment moves ever.

2. Grouping together & buying a residential unit with friends

This option often seems unattainable but is still considered as a possibility in terms of homeownership. It involves selecting the right group of friends and agreeing on what to buy. It is not uncommon among millennials to live with roommates (like 3 or 4 people living in the same apartment or house).

If such an opportunity arises then the prospective buyer can buy a property and pay the rent into a collective mortgage.

Here are some considerations to think about when it comes to collective purchase for a property:

The best group size for a collective purchase

Smaller group sizes are preferred of around 2 to 3 people. Larger the group, greater the chance of discord and more difficult decisions arise regarding the property.

Is it good or bad for the group members to be married couples or single individuals?

It is usually better for the members to be single because married group members then become entangled in a split between themselves. Also, a disenfranchised spouse can attempt to call it a matrimonial home and make things hard for everyone.

Any legal precautions to take in averting future financial conflicts and issues?

There should be well-drafted agreements between the parties, with the inclusion of how one party can leave the arrangement if they wished to.

Any monumental problems with grouped real estate purchases from a legal viewpoint?

Friendships change with time hence people should know who they are living with and hence, arrange a good exit clause. This helps avoid future issues if they arise as most legal issues in this regard start as interpersonal problems.

This option has quite a lot of considerations but in the current real estate climate where a lot of people live in rental apartments with roommates, grouping together with close friends that are trusted and loved is a great way to enter real estate which turns monthly rental expenses into a collective investment.

3. Waiting and saving

The real estate climate has changed drastically but the classic model of renting an apartment, saving them money and waiting for the right opportunity to buy is still applicable. Patience is a virtue in this matter.

This strategy requires creativity, self-discipline, and patience. Prospective buyers need to think of it as a lifestyle change. Why? Because a change of lifestyle must be considered while spending the money like eating less from outside, skipping the morning Starbucks, using public transport over Uber, putting off overseas vacations by a few years, paying down debts and creating a strong credit.

There are people that make a home on rent, those who own and those who rent while saving to own.

It is preferred that prospective buyers consult financial advisors (or close friends who are financially smart) about aggressive investing plans to help amplify the savings quicker. A savings account has a rate of less than the inflation rate is causing people to lose money.

4. Buying a property at a lower purchase price

This is a strategy that everyone has seen before and it is perfect for a first-time buyer entering the world of real estate. But it isn’t a glamorous option.

This method involves searching for condos and homes considered less desirable by market values which thus result in a low purchase price. They can be found in neighborhoods that are undesirable and unfashionable, at a distance from downtown, in less desirable structures or can be a classless unit in a good building.

There are various reasons why a condo or a home is below market value. Buyers need to search them out diligently.

The central idea here is that prospective buyers purchase an affordable property within their budget, enter the real estate market, and hope that overall property values go upwards. At day’s end, this way of owning a home is a gamble. But if it pays off, then the buyer has positive cash flows coming in and it will lead to a prime purchase in a few years.

5. Purchasing somewhere else

A lot of millennials are doing this. It has less to do with home prices and more with a lifestyle choice. Many millennials are working on a ‘work with your hands’ philosophy like craft brewing beers, hairdressers, artisans, butchers, car modifiers and the like.

Homeownership comes next on the list of these peoples. Buying an old house or a homestead outside the Greater Toronto Area which they can turn into a small farm or a workplace type thing by growing vegetables, flowers, raising chickens, goats and cattle, or opening their workshop in that home has a lot of appeals these days.

This is a good step to owning a home, but this may require the prospective millennial buyer to step out of Canada’s large cities and embrace a new small-town lifestyle outside the metro areas.

However, the opportunity to buy condos in small towns and cities is a bit difficult. There are projects in Kingston, Kitchener, Waterloo, Oshawa, Hamilton and Cambridge that seem to be catering to them though. However, these projects tend to cater to the needs of those wishing a luxurious lifestyle away from bustling cities, speculative investors or retirees or the like.

Like buying a home at a low price, buying outside the major metropolitan zones (the GTA for instance) will help millennials enter real estate. This will help them create their own net worth and prime themselves for a second purchase in the coming days.