How to buy an entry level house for less than $250,000

storey and a half

About a month ago, I met with a young couple who had recently moved to Kitchener Waterloo. By recently, I mean within the past two years. I met with them over coffee, as I like to do with potential clients. With new clients, we kind of interview each other to see if there is a good fit. They like to find out, I suppose, if I’m the guy on the blog. I like to find out if their goals are attainable and what they expect to happen, how soon and how prepared they are for the work that lies ahead.

With these new clients, they, like most young people a couple of years out of school, were looking for an entry level home. They did not want a townhouse or a semi-detached house and they certainly did not want a condo. So far, so good. Single-detached, stand alone houses are at the top of the food chain. They have land, a limited supply. Houses are better investments in terms of appreciation.

The problem of course, is money. The price of houses in Kitchener Waterloo has almost doubled in the past 12 or 14 years (maybe 10 years, I don’t know). Salaries and wages have not doubled. Houses are expensive for first-time homebuyers. These first-time homebuyers wanted to buy an entry level house and they wanted to spend less than $250,000.

I honestly didn’t think we were going to be successful. On my laptop, I showed them what was on the market in their price range (basically nothing). The houses on the market on that day were either falling over or in terrible neighbourhoods or falling down in terrible neighbourhoods. But I know from experience that the real estate market is alway changing, everyday is a new adventure. There are always new houses coming onto the market, and everyday there are homebuyers buying and leaving the market, change is constant. I’ve tried to find an analogy for the real estate market. This is the best I’ve got:

 

The real estate market is like a supermarket. There is product coming in the back door and finding its way onto shelves and customers coming in the front door and grabbing a cart, hunting and pecking for what they want. Somewhere in the store, the buyer finds what he’s looking for, then buys it and leaves.

 

Long story, short, with this young couple, we quickly found the right home. We found it. We bought it and now they are just waiting to move in. It is a clean and modest little place in a convenient and safe neighbourhood (North Ward). It has a garage and a large yard, a warm, dry basement. They paid $230,000

Here’s how we did it.

 

How to buy a freehold property for less than $250,000

 

where are the $250,000 housesLocation

The house you are looking for is going to be old. When I say old, I mean more than 40 years old, likely older than 60 years. That means it will be within the oldest parts of Kitchener Waterloo. The house you are looking for will likely be inside the Conestoga Parkway to the east and the south and bounded by Westmount to the west, Erb to the north. Here’s a map.

 

Number of bedrooms

Recent sales data shows that in the under $250,000 price range, your choices of number of bedrooms is about equally split between 2 and 3. It is also possible to buy a four bedroom home or a one bedroom home for that price – there are two or three sales per year of both of those.

 

storey and a halfStyle of house

The majority on the homes selling or sold for below $250,000 are 1 and 1/2 storey. They make up about 50% of the houses in this price category They are cute little houses. Here’s a picture of one.

Little bungalows are a close second making up about 30%.

Two storey homes make up the rest.

 

Number of bathrooms

About half of the houses have one bathroom, the other half have two. Finding a house with three or more bathrooms is uncommon.

 

Parking

About half of the homes you find in this price category have a garage or a carport. The others don’t.

 

 

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