You're a strong, single woman. You have a great career, a bright future and fantastic friends. Your life is on track — financially, emotionally, spiritually — and yet, you're still missing one big thing: no, not a man, but rather a home to call your own.
For many single women, making the leap into homeownership can be a scary proposition. Handling a mortgage payment on one income can be tough, but it's far from impossible. According to Sandra Rinomato, the host of HGTV Canada's new series Buy Herself and owner of a full-service real estate brokerage in Toronto, one in four new buyers on the market is a single woman. [More: Single mom, secure future: what you need to know]
Buying a home doesn't have to be put on hold until you're part of a serious relationship. If you're financially ready to start building your real estate portfolio, don't let finding a man hold you back. Whether you're divorced, never married, separated, or widowed, here are some simple steps to tell whether or not you're ready to start climbing the real estate ladder.
Take a look at your personal finances
The first step is to run the numbers. Calculate your household expenses to better understand your current budget. Knowing exactly what you're spending, and on what, will give you a better idea as to whether or not you can afford to be a solo homeowner.
Next, take a good hard look at your debt. You're going to need to share this information with your mortgage broker, so there's no use putting it off. When calculating your debt, remember to factor in costs like student loans, car loans or leases, lines of credit, and credit card balances. [More: Sexy, single and 60: The 'grey divorce' trend]
Now, add your household expenses to your monthly debt payments — the resulting figure is your total monthly expense figure.
Understand what you can really afford
Before you start trolling the MLS Listings for open houses, talk to a mortgage broker and secure a mortgage pre-approval. This will help you to better understand how much money you can actually afford to spend on your new home.
Once you know what your magic number is, sit down and do some additional calculations. The maximum home price that you can realistically afford depends on your gross monthly income, your down payment and your mortgage interest rate.
Consider additional costs
It's crucial that all homebuyers, and especially those relying on a single income, take the time to better understand the additional costs of owning property. From inspection fees and legal costs, to monthly utilities, insurance and renovations, it's easy to become overwhelmed.
Single-only suggestions to keep in mind
Finances are always an important consideration when buying real estate, regardless of your gender. However, single women are faced with a number of specific issues when it comes to buying a home. Here are five important things to keep in mind:
1) Stay safe when you're single
Safety is always a concern when buying a house, especially if you're planning to live in the home alone. As a single woman, it's extremely important that you take the time to research potential neighbourhoods. Your realtor should be able to provide you with an honest opinion of the neighbourhood, as well as crime statistics. [More: Savvy tips for buying your first digs]
When it comes time to move into your new home, make sure you take the proper precautions to protect yourself, your belongings and any children you may have living with you. This should include installing heavy-duty locks if they aren't already in place and/or a security system.
2) Make sure you're properly insured
Insurance is of the utmost importance when you're carrying a mortgage on your own and relying on a single income to pay all expenses. Without the proper coverage, you could lose everything you've worked so hard to achieve. When shopping for a home, make sure you take the time to research critical illness and disability insurance plans. Factor your monthly premiums into your total monthly expenses.
3) Consider taking on a rental unit
If you're looking for a way to offset your mortgage payments, consider purchasing a home that has a rental unit within it. Just be careful. Managing a property and tenants can be a full-time job. Before you jump into the role of landlord, stop and research the various pros and cons. Talk to other property management professionals and really get a feel for what the expectations will be. Consider safety again as well. Because your renter will be living in very close proximity, you need to ensure you trust them and feel comfortable being in such close quarters.
4) Hire qualified contractors
Buying a home on your own can be an exhilarating and empowering experience. Just don't let your newfound independence cloud your judgement when it comes to taking on additional projects — like home renovations. By all means, renovate your kitchen, but don't forget to ask for help with issues you're not familiar with. There's nothing wrong with painting the walls with a group of girlfriends, but if the outlet in the hallway doesn't work, don't start playing with the wiring. [More: Moving on up in costs: The unexpected costs of moving]
5) Don't ignore maintenance issues
When you buy a home by yourself, there's no one to unclog the toilet but you. And no, ignoring the problem will not make it go away. Never neglect a problem that puts you in danger or could get worse if left untreated. While it might cost you a few bucks to have someone come in and repair the problem, it will cost you more not to.
What happens when Mr. Right comes along?
Many single women hesitate to purchase a home on their own, assuming they may have to sell it shortly — should they meet Mr. Right. Should that happen, there are two very viable options.
Keep the investment in your portfolio and rent it.
- Sell it and take the equity.
A very attractive proposal
When it comes to purchasing real estate, don't put your dreams on hold just because you're single. A woman who can manage her money and buy her own home is much more attractive as a long-term partner than one who struggles with financial independence. If you're financially ready, do your research and go for it!
GoldenGirlFinance.ca is a free personal finance and education site for women.
Nothing contained herein is intended to provide personalized financial, legal or tax advice. Before implementing any financial strategy, you should obtain information and advice from your financial, legal and/or tax advisers who are fully aware of your individual circumstances.