Many people feel that homeownership has now become an unreachable goal. In fact, while 72% of millennials have the goal of becoming a homeowner, KPMG found that almost half (46%) feel that homeownership has become a pipe dream. 

With rising housing prices, increasing interest rates and low inventory, it’s easy to understand the feeling of hopelessness in today’s housing market. 

If you’re an aspiring homeowner who’s struggling to get into the housing market, here are three tips to help if you have given up on homeownership.

1. Figure out what’s important to you

It’s important to figure out what you want as a homeowner, what your non-negotiables are, and if there are aspects of your wishlist that you are willing to compromise on.

For many, location is a key factor when buying a home. While you want to love the area you are in, and be near what’s important to you, this can be a challenge as housing prices tend to be higher in some of the more desirable, centrally located areas in the city. 

Size is also an important factor. Being able to envision how the space will work and where your possessions can fit helps make the space feel like a home. It helps to envision growth in the home whether you are looking to expand a room into a gym, create an at-home office or grow your family. It’s exciting to think about the potential growth and long-term changes to a home!

Building equity in a home. This is one of the key benefits of being a homeowner compared to a renter. For many people, building home equity is a central way to build personal wealth, as equity is something that is able to grow value over time. The benefit of growing your equity is that once you are ready to sell your property, you will be able to profit from the amount of equity you earned based on the home’s value at the time of selling.

These are just a few of the many factors that people consider when looking for a home. If all of these factors are important to you but you find that housing prices that meet these criteria are out of reach, then you may benefit from looking into alternative housing options. 

2. Look into alternative housing options

While homeownership can feel like a challenge for many, it’s important to remember that there is more than just the traditional way to own a home. 

Many Canadians have begun to explore alternative housing options, such as renting out a portion of their home to help pay off their mortgage.

Other alternative options include housing co-operatives. These are essentially legal associations that are incorporated as a co-operative. They provide at-cost housing for members and are member-controlled through voting. Residents will each own a share of ownership of the building where they live and when they are ready to sell they receive a limited return. 

 If these solutions don’t sound like the right fit for you, there are more options out there. It may be helpful to start looking into innovative models.

3. Look at innovative models

Innovative homeownership models are emerging to help increase accessibility to homeownership.

One innovative model is a rent-to-own solution. Rent-to-own agreements have two major parts: a standard lease agreement and an option to buy. A rent-to-own agreement gives you the opportunity to rent for a certain period of time, with the option to buy the property by the time the lease runs out. 

This gives you more time to save before putting down a large down payment, however should you decide to not take on the mortgage and follow through with purchase, you risk losing all of the equity you’ve been saving up and your initial deposit. You can learn more about how rent-to-own models compare to Key’s co-ownership model here.

Other innovative homeownership models include co-ownership. Key’s model is a co-ownership or a co-equity model and it is unique as it removes the two largest barriers to traditional homeownership; needing to save a significant amount for a downpayment, and the need to take on a mortgage. 

To become a co-owner with Key, the initial home equity investment is only 2.5% of the value of your suite. Once deposited, as an Owner-Resident, you will get to live in your own suite and start building equity right from day one. Key also offers a Co-financing Benefit designed to help you earn equity faster and on your own terms. You can learn more about how co-ownership models work here. 

As an aspiring homeowner in today’s market, real estate can feel overwhelming. If you’re working towards buying your first home, it’s important to consider what is important to you, and explore what your options are. 

At Key, we want more people to have access to homeownership, so that everyone can prosper from real estate. If you’re an aspiring first-time home buyer, learn more about alternative homeownership models  if co-owning makes sense for you.