3 Creative Ways to Buy Real Estate in Canada

Rent-to-own programs are just one of the ways in which Canadians are taking a non-traditional approach to step on the property ladder.

By Josh Sherman | 6 minute read

Catherine Obaigwa, left, and Craig Ruttan and his husband, Alex Rand, right, have taken unconventional approaches to homeownership.

With sky-high housing costs in cities and towns across Canada, the prospect of homeownership may seem unlikely at best. In fact, 72% of Canadians who don’t own a home have given up on the dream of buying one, according to the results of a 2024 survey from public pollster Ipsos.

However, despite a challenging affordability landscape, more than one industry professional Wahi recently spoke to insists ownership is still attainable — homebuyers just need to think outside the box. “I think gone are the days of getting into homeownership the way our parents did,” says Rachel Oliver, co-founder of Clover Properties, a Greater Toronto Area company that helps renters become homeowners. “The purchase prices were much lower, and now we’re dealing with a completely different economy,” she adds.

“Homebuying, I think, in general needs to be redone, rethought, [and] revisited,” Oliver continues. “You don’t have to go through those big-bank institutions to find a way into homeownership,” she adds. Here are three creative ways to step onto the property ladder, according to Oliver and other experts. 

1. Rent-to-Own

Catherine Obaigwa was looking to relocate from London, Ont., to Sault Ste. Marie, Ont. for work as an aircraft mechanic, but she was having trouble finding accommodations. “It was kind of hard to get a house of my liking, because most of the houses that were available for rent were not really what I was looking for,” Obaigwa, who moved to London from Kenya, in 2022.

While homes that were listed for sale appealed to Obaigwa, she wasn’t in a position to purchase. She was not yet a permanent resident, and so legally could not own a home in Canada. However, she soon found a solution on social media: rent-to-own.

In a rent-to-own model, a tenant signs an agreement to purchase the property that they are renting at an agreed upon price at a later date. During their lease, a portion of the tenant’s monthly rent is set aside for the downpayment. Typically, the tenant-owner brings a deposit to the table as well. In Obaigwa’s case, she put 5%, or $30,000, towards a detached home in May of last year, although the amount varies depending on the agreement.

This past October, with her permanent residency established, Obaigwa took possession of the property from Requity Homes, a company that purchases homes for renters. “Rent-to-own helps you be able to get what you want at the time that you want it — it’s a really great program,” Obaigwa tells Wahi.

Requity, which operates in more affordable markets such as northern Ontario and the prairies,  lets rent-to-owners enter its program with as little as 2%. For those who haven’t heard of the rent-to-own model, Amy Ding, founder and CEO of Requity, compares it to leasing a car. “It’s pretty common nowadays for people to lease a car at a fixed monthly payment and towards the end of the term they can decide whether they want to own that car or not,” she tells Wahi. Rent-to-own is very similar, except that we’re talking about a house,” she adds. Under Requity’s model, the future sale price is based on an assumption of 5% appreciation per year.

Rent-to-own can create a pathway to ownership for potential homebuyers who are new to Canada or self-employed, lack a full downpayment, have less-than-excellent credit, or have gone bankrupt in the past two years, Ding notes. The program gives the tenant time to build up their credit and save. “Generally speaking, they do need to have a good cash flow — they do need to be employed,” says Ding.

Oliver, of Clover, acknowledges that the rent-to-own model is not without risk. One could lose their deposit and monthly contributions if they aren’t able to close the deal at the end of the rent-to-own term. However, Oliver says, Clover works with clients if they aren’t ready to buy at the end of the usual three- to four-year term, she says. “If they can’t qualify for the mortgage due to some unforeseen circumstance, we get it — life happens,” says Oliver, who estimates only one-in-10 rent-to-owners aren’t ultimately successful. “We’re families helping families, so we work with these families to help them overcome their barriers.”

2. Co-Buying

During the pandemic, a friend approached Craig Ruttan about purchasing a home together. In February of 2021, Ruttan and his husband, Alex Rand, took the leap, purchasing a duplex with another couple. “It made it more affordable and let us get more space in a better neighborhood than we would have on our own,” Ruttan tells Wahi.

The arrangement is an example of co-buying, which can be loosely defined as purchasing a home with someone who isn’t a romantic partner. In an arrangement such as Ruttan’s, everyone is on title, but there is one mortgage. “The biggest thing is that you need to be aware that you’re going to be in debt with another person. You’re co-buying a house, but you’re also co-mortgaging a debt, and that is critical to understand,” says Parimal Gosai, CEO and co-founder of Husmates, an app that connects strangers interested in co-buying property together. 

About 80% of the co-buyers Gosai encounters are first-time homebuyers like Ruttan: “That’s the number-one client base that we have: younger folks who can’t afford.”

The ideal co-buying agreement is between two to four people, suggests Gosai. Any more, and it can be difficult to reach consensus among co-owners. “It gets more complicated. There’s way less control on your home,” he says. “People ultimately want agency over the place that they live in. If you start having to split that up… decision-making becomes harder.” 

Co-buying is especially helpful for buyers who could afford a smaller condo today but are part of the 61% of Canadians who want a single-family home instead. Typical co-buyers through Husmates come to the table with between $50,000 to $100,000 each, which is enough for a condo — but not much more in Canada’s most expensive markets. Husmates co-buyers most commonly purchase single-family homes priced between $1.2 to $1.8 million, Gosai estimates.

Under certain conditions, it is possible to co-buy without a downpayment. For example, Gosai saw an arrangement where one party didn’t have any savings, but they had a substantial income. This person covered most of the monthly mortgage payments to build up equity. The goal is that all parties will eventually have an equal stake in a property.

Ruttan and Rand had initially split the duplex 50/50 with one other party, but they recently moved into a new laneway home that they built out back, allowing an additional pair of co-buyers to share in ownership. “Another couple who are friends of ours bought in, and they have taken over our old unit,” Ruttan explains.

With six homeowners in the mix, decisions aren’t always easy. There are debates about repairs, for instance, but overall the group stays on top of things with monthly meetings. “The key is to come at it with emotional intelligence,” says Ruttan, who notes co-buying isn’t for everyone. “You have to like other people and want to live with them. It’s a very intimate relationship,” he says. “You have to be willing to get financially naked with someone else and put all of that on the table.”

3. Fractional Investment

Fractional real estate investment won’t put a roof over your head in the short term, but, for those with a higher tolerance for risk, it could be a way to grow your wealth and accelerate downpayment savings.

In short, with fractional ownership, the investor owns a share of a property, similar to a stock. The concept isn’t new — since the ‘90s, real estate investment trusts have allowed Canadians to collectively own property. But as with co-buying and rent-to-own, technology has made it easier than ever for Canadians to get into fractional real estate investment.

One such platform is addy. “Basically we’re an online investment platform that allows Canadians to be able to participate in real estate ownership,” says Stephen Jagger, the platform’s co-founder. To date, 55 projects — mostly existing buildings — have landed on the platform, including retail outlets, industrial warehouses, and offices. Through the platform, Canadians can have a stake in a property for as little as $1. Typically, the investment is for a set period of time and offers a percentage return at the end of the term, with some opportunities paying regular dividends.

“Obviously $5,000 is not going to get you anywhere in any market in Canada — you’re not buying any piece of real estate,”  Jagger says. “But in our world, you could take that $5,000 and cut it into five $1,000 investments, or 10 $500 investments and diversify your investments across different asset types.”