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Bigger CAN be better…

Reason #1: Life Transitions

The number one reason most people move to a bigger home is life transitions: moving in with a partner, getting married, getting pregnant, babies turning into toddlers, kids turning into teenagers, or ageing parents moving in with you. Of course, more people usually need more space…but life transitions often mean you need a different kind of space too. That might mean upgrading to a house from a condo to have more privacy from the in-laws or selling your townhouse because your toddler is struggling with the stairs, or needing a yard for the kids or a basement for the teenagers or a nanny suite for the nanny. Moving to a bigger home during life transitions can help reduce stress and set you up for success.

Reason #2: $$ Unexpected Financial Windfall $$

Sometimes, the decision to move to a bigger home is easy: you’re suddenly the recipient of some unexpected money and can upgrade your lifestyle. Whether that’s for good reasons (job promotion, bonus, significant salary increase, made out like a bandit on some cryptocurrency or weed stocks), great reasons (parental gifts, a lottery win, marrying someone with a trust fund) or not-so-great reasons (inheritance, divorce or lawsuit settlement), moving to a bigger home is often a no-brainer when your financial situation improves.

Reason#3: You Need More Space

The high prices of homes in Toronto mean many of us are living in homes that are smaller than we want them to be. Your closets are overflowing, you’re renting offsite storage lockers, you’re sharing your bedroom with the baby and shipping your parents off to a hotel when they visit. More space just might equal more sanity.

Reason #4: You Want An Income Apartment

Many smart Toronto homeowners rent out part of their homes to help subsidize their mortgage or allow them to live in a neighbourhood they couldn’t otherwise afford. It’s not always easy to turn an existing basement into an apartment, and unless you want a roommate, you can’t turn your condo into an income-producing investment. The solution? Move to a bigger home that already has income potential.

Reason #5: There’s No Better Place To Watch Your Money Grow

If you’ve got available cash, there aren’t a ton of great places to invest your surplus money these days.

Ten years ago, the average price of a home in the City of Toronto was $405,064. Today? It’s $830,043.  That’s a 105% increase. Have your stocks, or GIC’s showed those kinds of returns in the last ten years? I know mine haven’t.

Of course, it’s important to diversify your investments…we’re not suggesting that you should put ALL of your money into real estate. But you can’t live in your stock portfolio either.

Reason #6: Increase your ROI

Sorry, time for some math. If you own a home and prices go up 15% while you own it, here’s what your return on investment looks like at different price points:

  • $112,500 on a $750,000 home
  • $150,000 on a $1 million home
  • #225,000 on a $1.5 million home
  • $300,000 on a $2 million home

Bigger, more expensive homes, mean you make more money on your investment (in a good market). If you can afford it, buy a bigger house and reap the returns.

Reason #7: Tax-Free Investment

As Canadians, we are taxed. A lot.

The good news is that your primary home is exempt from capital gains tax, so if it increases in value by $200,000, that’s $200,000 tax-free into your bank account when you sell it. In Canada, your primary residence is really the only way to invest your money tax-free – even RRSP’s are just a tax deferral strategy that will catch up with you when you’re older.

If you’re looking to maximize your tax-free primary home exemption, buy a bigger home. A 10% increase on a $1.5 million home is an extra $50K tax-free more than you’d have if you lived in a 1 million dollar home.

Reason #8: Save Your Marriage

Seriously. A bigger home can be a marriage-saver, whether it’s a second bathroom for your spouse (I speak from experience) or multiple living/TV areas so that Selling Sunset can be watched at the same time as Hockey Night in Canada. A bigger home means there’s less clutter to fight about and more places to hide when disagreements inevitably happen. And of course, there’s that all-important real estate truth: Happy Wife, Happy Life. And yes, this is true for husbands too, it just doesn’t rhyme as easily.

Reason #9: Work From Home

Whether your boss has finally decided to let you work from home or your side-hustle is blossoming into a real business, having a dedicated home office can dramatically improve your productivity (and your posture). Trust me: being hunched over your laptop on your couch or at the dining table get old fast (again, I speak from experience).

Bonus: you can write off a portion of the costs of your home against your income taxes!

Reason #10: Forced Savings Via Your Mortgage Payment

While you probably don’t actively think about your mortgage payment every month, part of every payment you make is going towards paying back the principal of your mortgage and building equity in your home…you’re essentially paying yourself. Buying a bigger home (and thus paying a bigger mortgage payment) means that you’re being forced to “save money” you might otherwise waste on frivolities. Of course, there are interest costs to consider too, but if a move to a bigger home means that you’re putting an extra $200 a month against the equity in your home, you’re essentially paying yourself an extra $200 a month.

Moving to a bigger home isn’t the answer to all of life’s problems, but it can help. If you’re thinking about upgrading your home check out our Guide for Move-Up Buyers.

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