My two cents: as long as you possibly can without going crazy.
A lot of my first time buyers are itching to get out of their parents’ basement (or their kiddie bedroom, if that’s the case…), but they need to first weigh the pros and cons of living at home versus moving out on their own…
I love my Mom and Dad, and I’ve roomed with both of them in my adult years. I’ve taken trips to Idaho with my Mom and my wife for weeks at a time, and I’ve slept in a tent on Mount Kilimanjaro with my Dad. I have no problem living with them in small doses, now, as 33-year-old, but had you asked me if I wanted to live with them at 22 or 23 years old, I think I might have given you a different answer…
The most common reason I hear from a young person looking to buy their first condo is, “I want to get out of my parents’ house.”
And these kids range in age from 22 to 32. I’ve had clients that at 32-years-old, are still living at home with their folks, and it seems that every year, that number increases. Once upon a time, you flew the coop as soon as you turned 18. Your dad shook your hand on the front step of the house and said, “Good luck, son.” That’s no longer the case…
Toronto is full of “kids” in their 20’s that still live at home, and personally, I see nothing wrong with that.
Toronto is expensive – from the daily cost of living, to the cost of real estate, and if a young man or woman can save $10-$15K per year by living at home and salting away income, then more power to them.
The flip side of the argument, of course, is that most people this age don’t want to live at home anymore! After two decades under their parents’ roof, they’re looking to get out on their own, spread their wings, and start experiencing life for real.
I see both sides of the argument, and I can argue both sides as well. And probably once per week on average, I’m contacted by a young person looking to move out, and we examine the pros and cons from head to toe.
Often, I have the young man or woman that puts ZERO value on living at home, ie. the free meals, laundry done by Mom, etc. And just as often, I have the young person who puts ZERO value on “growing in life” as they move out on their own.
But I find that when these youngsters are number-crunching, they’re already leaning one way or the other.
Last week, I spoke to a girl who wanted to get out of her parents’ Oakville home as quickly as possible. I played devil’s advocate, and said, “You’re a C.A., working downtown – you must be making some good bank! Maybe you just keep stuffing your mattress!”
To my absolute amazement, she replied, “Well the mattress is part of the problem. I can’t bring a guy home when I’m living down the hall from my parents!”
ZING!
She went on to tell me, “Have you seen Trainspotting? It’s been sort of like that, and I’m tired of it.”
I had to seek clarification from a friend of mine who is a movie buff, and he reminded me of the scene where an unsuspecting guy, who had just spent the night with a girl he met, ends up having breakfast with a man and a woman who he thinks are the girl’s roommates, when in fact, they’re her parents.
As I said – everybody has his or her own evaluation criteria, and certain things – such as the ability to be free and clear of your parents in ALL respects, have tremendous value.
The point I’m trying to make is that it doesn’t all come down to dollars and cents, even if that’s the most important calculation you make.
You have to consider the intangibles, and you’d be hard-pressed to convince me that there aren’t any.
I spoke to a young man earlier this year who is living in Markham, and commuting to work downtown each and every day. He said he pays his parents $400 per month in room and board, and he spends $1,000 per month, all-in, for his car lease, insurance, and gas. He told me, “If I lived downtown, I’d ditch the car, and get a TTC Metropass. That g-note turns into a c-note immediately!”
But then he added, “Instead of spending $1,400 per month, I could rent for $1,200, and save the difference. If I can’t find a place for $1,200 per month or less, then I’d stay at home.”
So I asked him, “What about the intangibles?”
He didn’t follow.
“What is it worth, to you, to live downtown?” I asked.
He followed up with, “Well, as I said – that $200 spread, or, say, $400, if I could find a place for a thousand bucks!”
Maybe I wasn’t leading him enough, so I said, “Don’t you think there’s a monetary value to living out on your own? I know it’s tough to put a price on, but isn’t it ‘worth’ something to be living downtown in your own place, as opposed to with your parents?”
He said he’d never really thought of it that way. But you have to. You just have to!
There IS a value to growing up, and getting out on your own, and even if you’re an accountant or a financial analyst, who is accustomed to counting every single penny – you have to admit that there’s an intangible value to moving out of your parents’ place.
So continue with the example above; isn’t there a value to saving two hours per day, or ten hours per week in the car, driving back and forth from Markham to Toronto? I think there is!
That young man who drives in from Markham each morning, and home each night, is spending TEN hours in his car, which is ten hours he could be working at his job and generating more income, or ten hours he could spend watching Challenge Rivals II on MTV (sidebar: I am forced to watch this every Wednesday night by my wife).
But an opponent to this argument would also add that this young man is eating three square meals per day for free at home, and he’s getting other intangibles, such as laundry service, cable TV and Internet, a “common area,” ie. the garage where he lifts weights or the backyard where he hangs out with his friends, and a slew of other benefits that also have to be weighed, and somehow monetized, as “intangibles.”
So I guess the point I’m trying to make is that whether you’re an advocate of staying at home and saving money, or getting out on your own and growing up, there are intangibles that you have to consider.
And then there’s a line that you have to draw in the sand when it comes to cost.
If you’re 22, and you’re living at Yonge & St. Clair with your parents, for free, and your only cost is the $100/month TTC Metropass that you use to travel a paltry ten minutes downtown to your office, then buying a condo and suddenly spending $1,500/month in mortgage, $400 in maintenance fees, $200/month in taxes might not seem worthwhile.
Some of the most hardened real estate salespeople will shout, “Buy a place, and start paying down mortgage principal!” But I’m not convinced that’s a solution for all.
To go from virtually nothing, to $2,100 per month all at once is a huge step for some people.
And this, of course, leads to a conversation about the appreciation of the property a young person buys, and then we’re into crystal ball territory, trying to forecast the market over the next 3-5 years.
A family friend is 22-years-old, and he is so happy living at home, that he puts ZERO value on the idea of “moving out and starting life.” He’s only concerned with the current state of the condo market, where he could get a deal, the long term growth outlook, etc. He couldn’t possibly care less that he’s sleeping in a single bed each night with baby photos on the walls.
So I suppose the question I would ask a young person is this: “What’s it worth, to you, to be out on your own?”
If it’s worth absolutely everything, then by all means, don’t concern yourself with capital apprecation, monthly carrying costs, and lost savings.
If it’s worth absolutely nothing, then stay at home with your parents until you’re 42, and they’re looking to downsize and kick you out.
But my guess is: everybody falls into their own category, and you’d be hard-pressed to find two people with identical evaluation criteria…
Graham
at 8:20 am
The best (?) part about the Trainspotting example, is when Renton finds out the girl, played by the lovely Kelly Macdonald, is only in high school.
JG
at 10:45 am
When she throws on the Blazer and walks to school – the look on his face is priceless! 🙂
Such an excellent movie. David – you really should see it.
Mike Danton
at 2:10 pm
WHat about all the feces that gets strewn around the breakfast table?! Birdie Num Nums!!
Geoff
at 8:57 am
As someone who moved out at 19 in 1994 and paid rent for 8 years afterwards (then mortgage), I can attest that people not understanding how expensive living on your own is is not new. I went to york which had a lot of commuter students and most thought me living on my own was cool – and then I’d say “how much is a box of tide?” “how much is a litre of milk?” – and most couldn’t answer it. That said, I don’t get why younger people feel they have a right to replicate the existence they have now when they move out. In other words, why do they have to buy at 22 and not rent a place with roommates, and if they do buy why does it have to be granite countertops and jacuzzi tubs. Move out and grow up. I think by 25 I refused to date a girl who lived at home still as I wanted someone who understood all the mundane details that life really has a lot of – the doing dishes even though you’re exhausted kind of days.
David Fleming
at 9:46 am
And finally – I know how old Geoff is! 🙂
Geoff
at 11:17 am
How old did I sound?
PS Some financial experts recommend parents charge adult children who are working market rates for rent and cleaning services. I know I have no intention whatsoever of doing my adult son’s laundry or cooking without compensation. And it wouldn’t be one of those “oh I’m saving every dollar you give as a downpayment for you later” type of deals. Instead it’s gonna be – “oh your rent last year paid for our cruise. It was sweet.”
Jeremy
at 12:05 pm
Geoff- you sounded like you were 38. Or possibly turning 38 within the next few months.
David- Metropasses are almost $130 now.
David Fleming
at 1:37 pm
Ah I’m just playing! I figured you were mid-30’s, but I like when I get these really personal tidbits from my regular readers.
It’s funny because some of you guys have been reading and commenting for 4-5 years now, and although we’ve never met, I feel like I know you guys. I remember you commented when my niece was born and said something like, “Can you tell I’m a father?”
Comments like that stick in my head.
Joe Q.
at 10:59 am
I’m with Geoff on this one (perhaps because we are of the same vintage) In the past people would have moved out of their parents’ house into an apartment or flat with room-mates, where they’d learn to budget and live on the cheap. Now it seems increasingly common to wait and live at home until you can afford to buy a condo. I also hear a lot of stories these days of students leaving home to go to university, but the parents buy them a condo or flat in the university town. Renting a place isn’t even on the radar in many cases.
GinaTO
at 1:20 pm
Ah ah! Same vintage here as well, and indeed since my early 20s I refused to date people who still lived at home because independence was (and still is) very important for me.
David Fleming
at 1:41 pm
@ GinaTO & Geoff
While we’re sharing about our past dating dos and don’ts….I once stopped dating a girl (I was 29 and she was 22) because she was just starting out in life and yet she had leased a $900/month Audi that was something out Fast & Furious!
She was making $32,000 per year, and I was so turned off by her lack of financial responsibility! She was also the “VIP Bottle Service” type, and most of her disposable income went to material goods.
Wait….this gives me an idea for Friday’s blog!!!
AndrewB
at 9:40 am
Good post David.
I definitely agree about placing value on the intangibles. My partner and I live at home with the rents. Both of us work downtown and we are currently saving for a condo. The biggest intangible value? Commuting time. I spend 2 hours door-to-door to get to work down and back home to Brampton in the ‘burbs. That’s 4 hours of my life lost sitting on a GO train and then braving street traffic. Not only would I save time living downtown, but I also would save large on variable expenses.
I think it also boils down to emotional maturity and ability to own on your own. I’m an RN, and I’d say I live a relatively comfortable lifestyle. I also don’t buy a lot of “nice to haves” and only spend my money on necessities (plus, I can save all that money to travel instead). For my partner and I, despite being in our mid-20s, we feel emotionally and financially ready to own something. I don’t think I can say the same for most other mid-20 somethings. The job market is fierce right now and people are landing decent paying jobs coming out of school. Tack on school debt and it’s no wonder most people my age stay at home into their 30s. They’d never pay off their debt fast enough if they did.
As well, I can see why people would stay at home too and not feel ready to move out. As well, I can see why young people don’t place value on those “intangibles” as you say. A lot of young people who live at home are used to a high amount of disposable income for “stuff” and place more value on getting that new pair of $200.00 jeans than living on their own. So long as they pay a bit of rent at home and get to blow the rest, that’s likely what matters to most. There will be a few for sure, but I see most young 20-somethings as focussing their money on stuff and debt repayment, not saving for a mortgage.
AndrewB
at 9:41 am
aren’t landing jobs is what I meant to say.
Mike Danton
at 11:30 am
Greg Focker?
AndrewB
at 2:49 pm
Oh yeah.
Jackie
at 11:35 am
I think too many people also play the culture card. “In my culture people live at home until they are married”. My response is, 1) in these cultures people get married before 25 and 2) in most of these cultures the adults living at home are fully expected to contribute financially and maintenance wise to the household (gardening, home repairs, cooking, cleaning, laundry, driving parents to appointments etc.). Any parent that does their children’s laundry past the age of 13 and does not have them doing dishes (or loading unloading dishwasher), or preparing a family meal once a week, or side dish with every meal, is doing a disservice to their child and any potential future mate they might have.
EdenRam
at 1:13 pm
Play the culture card in what context? As an excuse to spend every cent they earn, not pay rent to their parents, not taking responsibility for their portion of household chores, getting parents to do their laundry? Or are you talking about living with their parents longer while they dutifully save, and contribute toward the household both financially and by cleaning after themselves.
Enabling parents and lazy adult children exist in all cultures. Regardless, the length of time anyone decides to live with their parents affects no one else except those immediately family members residing in the home and the future partners of these individuals. My own parents split up when I was 24 and just finished university (I lived with my parents). Instead of moving on my own, I shared the rent on an apartment with my mother to help support my family. We bought a home together the following year (it was better than seeing her and my brothers in a crummy apartment) which enabled me to purchase on my own at 31 once we had enough equity to sell and buy our own separate properties. We all have a different path to independence. Living with the parents after graduation isn’t always the worst choice.
GinaTO
at 1:05 pm
Maybe I grew up in a completely different universe, but neither myself nor any of my friends had expectations to buy property in our early 20s. We were just happy to leave home and be independent (at 17 for me – bad family history), so the crappy bachelor apartments, the roommates and the shabby buildings were just fine for us. I was very proud to buy my first condo on my own at 31 because I never had this expectation that this was what I HAD to have. Completely different background, I suppose!
AndrewB
at 2:56 pm
That’s very true and I see your point.
On the flip side, why pay 1500/month rent for a decent downtown 1-bedroom, when one could stay home, save that money and then buy?
There’s many reasons for staying home. I stay home and save, however I also financially help my parents out, help with the house and have the benefit of saving a lot. It can be win-win all around.
As well, housing prices have skyrocketed in the last 5 years alone. If I was working like I am now, but this was 5 years ago, I could probably own something on my own. Now? Nearly impossible without eating KD everyday just so I can have a condo.
jeff316
at 10:45 am
In my case, scraping by to live with roomies in crappy apartments never appealed to me, freedom or not, plus I’m pretty low-key and my parents were pretty reasonable. For others, I can see the appeal of that lifestyle to them, and/or I can appreciate that others have different lifestyles that don’t mesh with living with parents, or that many parents are not easy to live with as mine were. We tend to absolutize the decisions of others, pushing their choices into the realm of expectations or assuming that they fit some stereotype, but I think by and large each person is making a rational decision in their own self-interest.
Alex
at 3:51 pm
Seems like the media likes to create this stereotype of the graduated 20-something living at home paying nothing, but I can’t think of a single person actually like that. I don’t know too many people with arts degrees though, and those are the ones who generally have a hard time finding a job. I wouldn’t blame someone without a job for living at home though, better that than go into serious debt while looking for a job.
jeff316
at 10:23 am
Why do people feel the need to buy young? Like Andrew said, I think part of the reason that renting isn’t on the radar is because it is so expensive to rent in Toronto that entering the rental market with minimal savings and an entry-level salary can easily become a path to renting long-term. Add on a fifth and/or sixth year of post-secondary, preferences for costlier condo rentals, and some student debt to that scenario, and current housing prices, and you’re not buying til you are 40.
But I think the real reason that people stay home later is sex. In the past you needed space from your parents to really experience sex in an adult context, whether that was living away at uni or moving out soon afterwards. Today, social attitudes have changed – it’s not as necessary, and for those who live away from home during uni they move back in with the parents after they’re done…they’ve already sown their oats and the norms aren’t so restrictive as they used to be.
I”m about a half-generation younger than Geoff and Joe Q so this may generational (maybe not) but almost everyone that I knew that lived away from home at university ended up coming back to move back in with their parents for almost as long afterwards. Almost everyone that commuted in to school moved out no more than two years after graduation. My family is a great example – my sister is the former, I’m the latter.
Both decisions build maturity – just different types. I know that my relationship with my parents evolved more smoothly to a more adult and independent state than that of my living-away peers (who still depended on my mom and dad, just not for laundry), but the learning curve to living away was definitely steeper for me. For my sister, she’s got all of the skills figured out, but living away for uni doesn’t give you a true understanding of just how much work it can be to manage all of the chores of everyday life plus those of having a house within the constraints of your normal 8-6 work life. My living-away friends had more fun for sure (unless they went to a commuter school like I did) but with hindsight I’m lucky in because living at home for uni was also the reason I could afford a house at 28. So it’s a balance, there are benefits and negatives for all of the situations.
Joe Q.
at 2:05 pm
It may indeed be generational and it may indeed be about rents. Not sure. In my cohort, likelihood of living with parents after finishing university seemed to line up with how far their university was from home. Those who went to university far enough away that visits home were infrequent tended not to move back in with their parents (granted, many of them went on to live in other cities — and many went to graduate school or medical school, not buying their first place until their mid-late 30s).
I agree about different types of maturity and I agree that there are many different “ways” to live at home. The university I went to had a lot of students from out-of-town as well as a sizeable proportion of “townies”. IME the “townies” seemed to have more fun — they seemed to go out more, go on vacations more. Again, just my experience.
Beacher
at 12:57 pm
David – let’s be honest – you really LOVE every single second of The Challenge: Rivals II!!!
David Fleming
at 6:06 pm
@ Beacher.
I do. You’re right.
It’s on tomorrow night and I can’t wait!!!
I’m pulling for Emily & Paula. They’re destined for that prize money!!
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Maggie K.
at 3:37 pm
I am 37 and a believer in moving away from your parents when you are 18. I grew up with 3 brothers and the only one of us who ended up living with our parents again as an adult was my youngest brother who was going through a tough time. I have a son now and I can’t imagine allowing him to live with us on a long-term basis while he is an adult.
My one brother and I both bought our first homes in our mid-20s while another one has still not bought a house and he is 32. To each his own, but I think their is a lot of value in having some times of struggle as a young adult as you make your way in the world.
Maggie K.
at 3:37 pm
*there