Alison Griffiths

First, the good news. According to Statistics Canada's most recent census (2006), an astounding 68 per cent of Canadian households own their home — with a little help from a mortgage lender.

Now, the bad news. One group is facing a tremendous uphill struggle to become part of those stats. Those between 18 and 34, roughly 18 per cent of the total population, are having trouble affording their first home. Despite current low interest rates the reason is simple. Not enough income chasing too many expenses.

An Industry Canada study found that wages for this age group, regardless of education, decreased significantly during the 1980s and right through to the new century. The trend has continued over the last decade as major costs for this group, from education to automobiles and housing, have risen.

But don't despair if you are part of this group and want a home of your own. Consider having a tenant pay part of your mortgage. An existing basement suite allowed me to buy my first house in West Vancouver. And adding a suite in a later home helped my family to weather a period of financial turbulence.

Depending on your location and the size and quality of your suite or room you could count on anywhere from $300 to $1,200 or more. That latter amount, by the way, will support roughly $200,000 of mortgage, assuming a five-year fixed term at current rates.

Another bonus is that expenses related to the rental (including a portion of the mortgage interest payments) can be deducted against the income generated. But, of course, you also must claim the income on your tax return.

A mortgage helper can come in the form of a completely separate apartment, a roommate or even a temporary boarder such as a student. The latter two are the easiest options for homeowners, especially condo and townhouse dwellers, unless you happen on a house with an existing suite or you have fixer-upper skills.

Rent can help you afford a home but there are costs, and privacy certainly is one of them. For example, I am very sensitive to other people's noises and also work at home so past tenants definitely intruded somewhat.

You also need to be good landlord material, which means being firm and also willing to do a bit of research about your tenant. I'm a sucker for a sob story and that has cost me. It took me months to evict a single mother with a young baby after she began entertaining johns in the apartment. And let me tell you, getting rid of a tenant determined to stay — even with cause — can be a difficult and expensive enterprise.

Having said all this, a tenant can be your ticket to affording your own castle. Here are nine tips for success.

  1. Carefully calculate the costs. Draw up a yearly budget. It should be fairly easy to estimate the income, though it's best to assume that you'll have the suite\room empty at least one month a year.
  2. Vetting is vital. Find out if and where they are employed and for how long. Checking references is also important, though no one is going to give you names of landlords who have nothing but bad things to say.
  3. Do a check. Ask for a copy of a recent credit report. Prospective tenants can refuse, of course, but if they also can't provide acceptable references you might want to pass on them.
  4. Don't hurry. If a tenant doesn't come along who fits your temperament and lifestyle, forgo a month's rent rather than pick an unsuitable person.
  5. If the rent isn't paid on time start the eviction process immediately. This may sound über tough but delays can mean no rent for some time.
  6. Short term is better. First timers should consider offering a month-to-month lease rather than annual one. If a tenant proves unsuitable it is easier to bid them adieu.
  7. Be business-like. Don't allow shared chores, for example, to be on a best effort basis and do put expectations on paper.
  8. Do NOT spend the damage deposit or the last month's rent. Put it in a separate account so you don't get caught short when a tenant moves out and you have to return it.
  9. Know your rights and obligations. Check with the provincial authority responsible for landlord-tenant relations.

Tenants can be a great financial resource for homeowners as long as you follow a few rules.

Alison Griffiths' latest book is Count on Yourself: Take Charge of Your Money. You can reach her at www.alisongriffiths.ca, and on Twitter at @alisononmoney.