(NC) With the costs of purchasing a home continuing to rise, it’s not surprising that a recent survey by Zillow and Ipsos found that a third of Canadians view a down payment as a barrier to homeownership.
Affording a down payment and qualifying for a mortgage obviously depend on the purchase price of the home you want, among other factors.
One alternative that can make a down payment more affordable is land-lease homeownership.
Land-lease homes typically cost about 30 per cent less than comparable freehold homes. This is because you purchase the home – owning it outright – but not the land on which it sits.
While land-lease homeownership is not as well known as other forms of homeownership, it is beginning to gain traction as a more affordable way to enter the housing market – with clear advantages for younger home buyers looking to purchase their first home. Aside from a lower purchase price, land-lease homeownership is also unique because of the way the community operates and promotes social connections.
Land-lease companies like Parkbridge, for example, remain involved in the community by providing professional management of community infrastructure and amenities.
And, homeowners enjoy walkable neighbourhoods, a wealth of social activities, outdoor spaces for gardening, entertaining and recreation and the opportunity to join clubs and socialize with like-minded neighbours. Land-lease homes also appreciate in value similar to comparable freehold homes.
All of these features of land-lease homeownership make it an attractive option for buyers who want to be able to purchase a home that meets their needs while being able to afford the down payment and the mortgage.