If you are wondering when you should move into a bigger Toronto house, the answer is actually not that complicated: when you feel ready. I know – this is much easier said than done. Understanding whether you are ready or not depends on several factors:
Your after tax/deductions salary
The appreciation in your current property
The area you want to move to
What you want in a larger home
Whether your current living situation is sustainable
Your after tax/deductions salary
The first item on this list is probably the most important one. If your take-home pay has not changed since you first bought your home, then you have to properly evaluate whether you would be able to realistic finance a larger property. If you have plenty of room left over at the end of the month for saving and spending, then you might be able to do it, but the only way to really determine whether you can support a larger home is put the numbers done and to project what your living expenses would be. Find out how much of a mortgage you would have to carry for a larger home, find out what the taxes would be, look into the utilities and maintenance costs and put all of these on your projected budget. If you can sustain the increase in maintenance and carrying costs, then you might be ready to move to a bigger house.
The appreciation in your current property
If you current property has increased dramatically in value, then even if your salary hasn’t increased a large amount, the gain can be applied to a larger home to bring down the mortgage you would have to take out on it – making it more manageable and feasible to move to a larger place.
The area you want to move to
If the property values in the area you want to move to have increased beyond what you can support financially (even with an increase in your own property), then you might want to reconsider moving or you might want to choose a different area. To ensure an easy and stress-free move, it is critical that you choose a property that is financially sustainable. The last thing you would want it to be house-poor.
What you want in a larger home
If you want your next home to have all the bells and whistles and be an executive-style property, then you should have the salary to sustain it, the increase in property value to give you the deposit you need and be found in an area that is affordable for you. However, if what you want is relatively modest and you are willing to put in some work to personalize it, then you can probably find something that will get you into a larger home sooner.
Whether your currently living situation is sustainable
The last factor on our list is also quite critical. If you are living in a two bedroom condo with three kids and another on the way, then you might need a larger place sooner than a family that is already in a three-bedroom home but want an ensuite or finished basement.
In the end, only you can determine whether you are ready to move to a bigger place. However, we hope that our list of things to look for has been of help.
Your after tax/deductions salary
The appreciation in your current property
The area you want to move to
What you want in a larger home
Whether your current living situation is sustainable
Your after tax/deductions salary
The first item on this list is probably the most important one. If your take-home pay has not changed since you first bought your home, then you have to properly evaluate whether you would be able to realistic finance a larger property. If you have plenty of room left over at the end of the month for saving and spending, then you might be able to do it, but the only way to really determine whether you can support a larger home is put the numbers done and to project what your living expenses would be. Find out how much of a mortgage you would have to carry for a larger home, find out what the taxes would be, look into the utilities and maintenance costs and put all of these on your projected budget. If you can sustain the increase in maintenance and carrying costs, then you might be ready to move to a bigger house.
The appreciation in your current property
If you current property has increased dramatically in value, then even if your salary hasn’t increased a large amount, the gain can be applied to a larger home to bring down the mortgage you would have to take out on it – making it more manageable and feasible to move to a larger place.
The area you want to move to
If the property values in the area you want to move to have increased beyond what you can support financially (even with an increase in your own property), then you might want to reconsider moving or you might want to choose a different area. To ensure an easy and stress-free move, it is critical that you choose a property that is financially sustainable. The last thing you would want it to be house-poor.
What you want in a larger home
If you want your next home to have all the bells and whistles and be an executive-style property, then you should have the salary to sustain it, the increase in property value to give you the deposit you need and be found in an area that is affordable for you. However, if what you want is relatively modest and you are willing to put in some work to personalize it, then you can probably find something that will get you into a larger home sooner.
Whether your currently living situation is sustainable
The last factor on our list is also quite critical. If you are living in a two bedroom condo with three kids and another on the way, then you might need a larger place sooner than a family that is already in a three-bedroom home but want an ensuite or finished basement.
In the end, only you can determine whether you are ready to move to a bigger place. However, we hope that our list of things to look for has been of help.
