Scott Mcgillivray’s Tip for First-Time Buyers and First-Time Investors
Planning Ahead HGTV Star, Scott McGillivray, talks buying vs. investing and the importance of using a professional every step of the way.
Mediaplanet: What inspired you to get into real estate?
Scott McGillivray: When I was in university, my landlord had my roommates and I go to the bank to deposit our rent money every month. One time, the teller made a mistake and gave me a copy of his statement by accident. When I saw how much he was making every month off of our rent compared to his mortgage payment I had a serious “Aha” moment. I started to investigate the feasibility of buying a house and renting it out. The rest is history.
MP: What’s your top real estate tip for first-time buyers?
SM: Don’t let emotions get in the way of smart decision-making. Buying your first property can be a very emotional experience. Over and over again I see people getting in over their heads because they’ve fallen in love with a property they can’t afford. Or they forgo a home inspection in an effort to try and beat out other offers. Get pre-approved before you start looking, and whatever you do, stick to your budget.
MP: Obviously there are a lot of moving parts when it comes to purchasing your first condo or investment property. What are some common mistakes that you’ve seen from first-time buyers?
SM: Not planning for all the associated costs— when you switch from renting to buying, you need to think about property taxes, legal fees, insurance, maintenance, repairs, and with condos, monthly condo fees. So often people purchase right at the top of their budget and they leave themselves with no leeway and no emergency fund. That’s almost always a big mistake.
MP: What are the benefits of seeking guidance from a professional at each step of the process?
SM: I’m a big believer in seeking help from those who know more than I do. When it comes to buying your first property, a mortgage advisor can help explain your options and figure out what plan and rate are best for you. A real estate agent who knows the local market is also an excellent resource. A good realtor can advise you on the ins and outs of the process, as well as help you find the right home at the right price for you. Your homebuying team should also always include a home inspector— make sure you know what you’re getting yourself into!
MP: What considerations should be made for buying a condo to live in? How are these different from buying a condo to invest in?
SM: The biggest difference between living and investing is making sure you can get enough back in rent to cover all the costs. Many condos come with amenities like pools, gyms, and party spaces— but you pay for these amenities through your monthly condo fees. If you’re buying it as an investment, you have to make sure that you can recoup those costs on top of the mortgage. Give yourself enough leeway that you’ll still be OK if these fees go up.
MP: What is the most crucial part of the condo-buying process?
SM: Truly understanding all of the numbers— what’s included and what’s not included with your condo. A lot of people mistakenly think that you don’t have to pay property taxes because you pay condo fees. But one has nothing to do with the other. It’s also important to understand that you can’t just change whatever you want in a condo. Some condos have rules about what materials you can and can’t use— stay alert.
Watch Scott's new show, Buyers Bootcamp, airing Sundays at 9PM on HGTV Canada, beginning April 1st.
The DreamMaker process is designed to make the home buying process seamless from beginning to end, with help along the way. From Real Estate Agents and Custom Developments, to Finance Services and Property Management, DreamMaker’s many years of experience makes the process seem like a dream!