Q+A with Romana King, personal finance columnist and director of content at Zolo

King says owning a home in today’s hot market is within reach, even for buyers between the ages of 24 and 40. She shares these thoughts with New Home + Condo Guide as well as tips on what homeowners can do to turn their asset into a part of their overall financial health.

NextHome New Home + Condo Guide: You say that a false narrative has emerged that most young people cannot afford to own a home in Canada’s hottest housing markets. You attempt to claim otherwise. Can you briefly explain what you mean by “strategic home ownership” and how it applies to the Gen Z and Millennial demographics?

Romana King: There is so much noise regarding real estate and homeownership but deciding whether or not to buy a home should rarely (if ever) be based on the state of the current housing market. Yes, this suggestion goes against solid investment principles, but with good reason: We don’t buy homes as an investment.

In my book I try to normalize the real reasons why we buy homes and explain how to turn the purchase of a home into a smart financial decision.

I don’t claim that homeownership is the only way to achieve financial independence. It isn’t. Nor is it the fastest way. But for any Canadian with a goal of becoming a homeowner, it becomes critical to change how we manage our single largest asset and biggest debt. The more homeowners are strategic about the power of leverage, tax-efficiency and value recognition, the better off they will be.

Thinking about homeownership strategically is about making smarter decisions when it comes to buying, budgeting, renovating, paying the debt and using equity.

NH-NHCG: What is a “smart reno”, why is it important, and how can a homeowner plan for it?

RK: Home renovations are an expense — with the potential of being an investment. Smart homeowners need to invest time in planning and researching before the first hole is dug or paintbrush is dipped.

Renos are an expense because, taken in isolation, virtually every home reno will not offer a dollar-for-dollar payback. For instance, the average return on a bathroom remodel is less than 65 percent; a basement remodel may get a 70 percent return, while adding an upscale master suite returns less than 52 percent.

To find smart renos, homeowners need to:

1. Make a list of desired renovations
2. Determine the reason of the reno. For instance, is the reno necessary to keep the home functioning properly? Or is the remodel due to personal preference?
3. List the costs. This requires research but will help you decide if the reno fits your budget and plan.

Ideally, you want to find renos that cost the least but add the most value. In other words, spend the least to add the most value.

But value isn’t a code for cheap. There are times when a good solution costs more than a cheap alternative, such as paying a professional to help declutter rather than buying more bins, racks and storage buckets.

Also, this doesn’t mean you can’t remodel or upgrade to suit your style or desires. Even personal preference renos are justifiable if the cost and results fit your goals.

NH-NHCG: What are three or four tips you can offer to future and current homeowners?

RK: The book isn’t a step-by-step strategy for buying a home; it’s a strategy for learning how to turn this asset into a critical part of your overall financial health. To help those aspiring to homeownership, here are some adapted takeaways from Chapter 3 of House Poor No More.

Invest in Your Future.

The key to getting your financial life under control is making a budget. Don’t worry if it’s not 100 percent accurate. The aim is to pay attention. The goal is to learn to make smarter decisions for each dollar you earn, save and spend —including the money allocated to housing costs.

Don’t Be an Ostrich.

Homeownership is expensive — plan for it.

Cash Isn’t King.

Cash is good for current expenses and emergencies — nothing more. Holding too much cash, either in a bank account or sitting untapped in an asset, means you’re losing long-term value.

Spend a Penny, Keep a Pound.

As a homeowner, expenses can quickly blow a hole through your budget. To prevent this, you need to keep your high-priced wealth-building tool — your home — in good operating condition. Learn how to maintain your home and all its components and complete tasks as they arise. Yes, it will cost you, but you’ll spend far less with consistent maintenance than with a neglect-and-pray strategy.