Buying my first property: Was I too young?

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I bought my first property at the age of twenty-one even though some of my friends thought I was too young and crazy. I loved to work hard and equally play hard afterwards. It would have been comparable if I were to buy my first condo here in Canada or flat for those of a British background.

I wanted to buy vs rent because with my down-payment I knew that my mortgage would be less than rent. My parents already had a few homes on the go and were renting them out so the mortgage would pay for themselves. It was the best decision they ever made, investing in real estate. They are still enjoying the benefits today of those mortgage-free homes and rental income. Somehow I wanted in on the action early so off I went and I found my first home fresh out of University.

How much do you need to buy a home? More than I bargained for and many people suffer because they fail to plan. I was almost one of those people.

Living pay to pay

Contrary to popular belief, I know what waiting for the next chunk of hard-earned money is like so I can pay the bills. Living pay to pay is not a place anyone wants to be in but for many that is a reality. There are jobs out there but seeing jobs on the job bank is one thing, having the required skills and education is another. Then when you do you are competing for top spot with those fresh out of University, those already working in the field and those still looking for work so it’s a tough world out there.

So, I was a single homeowner, fresh out of school barely with wings and working a full-time job for just above minimum pay to start. It got to the point where I had to really make sacrifices to make ends meet and only because I didn’t plan for the unexpected like I should have. My parents warned me about it so I knew it was bound to creep up on me.

It was probably the first time in my life that I started to feel the congestion of living pay to pay and I didn’t like it very much. I don’t even remember what the minimum hourly rate was but back then and still today we can’t be picky, a job is a job.

Bachelor cooking

Although I loved to cook, grocery shopping wasn’t my top priority and eating consisted of the pretty much the same menu plan for the first year. I was so busy that eating the same, quick, frugal meals seemed like the way to go. Let’s just say the tortellini and I were good friends in the kitchen. I later learned how much I enjoyed cooking through my travels around the world which I carried back into my kitchen.

Less than rent

I put a nice down-payment on the one bedroom one bath property which left me paying less monthly mortgage than I was if I rented in that area of the UK. In a way sometimes I feel like I had tunnel vision yet I was mature enough to say, hey I want to own my own home.

My parents were my money guides growing up and it carried me through into University. I was very aware and watched everything they did and I listened. My parents like many had to struggle to get where they are today but they are living the good life, but it came with sweat and a vehemence to succeed.

After University

Like many other students I thought that after school I would find a high-paying job and life would be towering, especially since I had no school loans to pay back. As you can imagine those pipe dreams did not happen and after University I had to settle for any job that I could find. The market was saturated and competition was fierce for jobs.

I later learned that it wasn’t my calling so I went on to take various jobs, some of which I stayed in for many years and progressed through the company into management roles. You learn a lot about yourself as you move up in a company, especially how much harder it is when you have one foot on the ground and your hands reaching for the stars.

Asking for a raise

It was clear that I needed to cut back on some expenses to make sure that I was saving money and that surfaced shortly after moving into my flat. No, I didn’t have an actual budget like we do today, the thought never crossed my mind as odd as that may be.

Like many other first time home owners we don’t always think of all the “needs” of a home year after year. Home maintenance wasn’t given high enough supremacy in the mathematical process of purchasing the home and that’s why when my wife and I bought our home things were different.

The thought of inquiring for a raise entered my mind, alternatively I needed to make more money or get a second job. How do I ask for a pay raise though? Not everyone is comfortable saying that they feel they deserve a raise in income. Sometimes we have to do what we have to do just to make ends meet but when more money is needed the same applies.

I decided to ask for a raise by setting up a meeting with my boss and simply asking for more cash but professionally. I prepared a pay raise letter at home and then I pretended I was talking to my boss to impel myself to get in and get what I felt I had earned. Sometimes it doesn’t work out, but if you don’t try then you are no better off than when you didn’t ask.

First I went over my accomplishments, my long and short-term goals for the company and why I deserve a raise. He must have liked my presentation because I received a raise and a promotion shortly after. I learned that having fear in our lives sets us back but remembering that we are only here once sometimes gives me the acceleration I need to move forward. I guess it’s just my way of being a positive guy, along with smiling and being friendly. Miserable is not me.

Living on one income

When you are living on one income as a single person everything matters and somehow you learn to make time to earn extra money. I gave high priority to making extra money on the side whether it was landscaping, cutting lawns, watching the kids for my siblings or working for my parents. I was always on the go but I also made time for myself to chill out and relax. When you know you have to rely on yourself you do what you can to keep the kingdom operative.  You also know that you have to take care of your health because there is only you, and no one else.

Emergency savings

It took some time but little by little I kept stashing away a few bucks here and there to build up what I like to think was a comfortable emergency savings. I had used all of my money to put a down-payment on my first home so I needed some sort of cushion just in case something were to happen. I had a credit card with a high limit but I was never one for paying by credit. If I couldn’t afford to pay cash I never purchased the item.

To be realistic I knew I needed some money in the bank though, just in case. Even though I may have only added in a fiver one week and more the next over time the bank account grew. That was the positive reinforcement I needed just like when I was a child with my paper route. I loved watching my savings grow and it transferred into an adulthood expedition towards my achieving my dreams.

Buying a house what to do- Investigate

Don’t be in such a surge when buying a home whether you are young like I was or if you are well into your career and ready to make the step into home ownership. Investigate all avenues related to home buying and talk to those that are living it.

Tips for buying a home when you are young

  • Save as much as you can for a healthy down-payment
  • Do your research
  • Plan for the unexpected
  • Save for the unexpected
  • Be open to making extra money
  • Don’t be shy to ask for a raise
  • Do maintain your home consistently
  • Be realistic and set goals

What did I learn from owning my first flat at such a young age? 

I learned that although we have these ideals about where we want to go, what we want and how fast we want to get there, we must plan. If we don’t do our legwork before we jump into big investments the joy it brings us when we make the purchase can be the demise of our happiness. If we aren’t properly educated on what we need to keep the motor running, we may lapse under money pressures if and when they arise.

When I sold my first property and bought my second home a few years later plus a few years wiser things were much different for me as a homeowner. Buying my first house so young may have come with challenges but I overcame them with pursuance.

Was I crazy to buy my first property at 21? Na, I’d do it again if I could because the best lessons in life are the one’s we create and learn from on our own. I’m still young, so if taking risk means I’m young and crazy I guess you can call me bonkers!

How old were you when you bought your first home?

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Mr. CBB
I’m from the UK and now a recent permanent resident in Canada. I bought my first house at the age of 21 after University then my second at the age of 24. I’ve always been fascinated with personal finance, savings, learning to make money and watch it grow while combating debts along the way. Canadian Budget Binder is a place where I get to share my experiences with personal finance and learn about yours along the way. I hope you stick around and check me out on Twitter, Facebook and Pinterest where I am active on all social media sites. Cheers, Mr.CBB
Mr. CBB
Mr. CBB

Comments

  1. Great post Mr. CBB! I wanted to buy a property at 23, however things changed and I decided I couldn’t have a mortgage when I was going to go back to school. It’s still a dream of mine to buy right after I finish in 2 years though, and this post was very helpful.

  2. These are all great tips especially when you are just starting out. I wish I took some of this advice. It could have saved me some major headaches especially involving house stuff.

  3. We bought our first house when I was 32 and wish we would’ve done it sooner. I always hated knowing that we were helping our landlord pay for his/her mortgage and not making headway for ourselves. That said, I agree that the most impactful lessons tend to be the ones we’re able to learn from and create on our own.

  4. I have told my little brother approximately 80000 times to cool his jets when it comes to purchasing a house, but he really doesn’t seem to want to listen. My parents have done the same thing, too. It sounds like everything worked out for you, despite being touch and go for a bit. It is pretty sweet that your mortgage was less than your rent. That is very often not the case, yet people are jumping up and down to purchase in those areas anyway.

    • Yes, I got lucky I guess as I found the house at the right time. Is he rushing in?

      • Anne @ Unique Gifter says:

        Yes, definitely. He just finished university in April and his wife has worked for two years, but only part time (teacher). I want him to settle a bit, get some coin in the bank and ensure that they really do want to be in that neighbourhood and city for several years, first.

        • It’s better to be prepared then walk in with your eyes half open. If I could do it all over again, I’d save for my down payment and make sure I had enough cash as backup just in case.

  5. ljhallan says:

    Like you I bought my first home when I was young and single (24) and in my second year of teaching. Thankfully my parents loaned me the money. I then bought a cottage property when I was in my early thirties and started buying rental properties soon after. I love being a landlord even though it was a lot of hard work when combined with teaching and raising my son. I am now retired from teaching but continue to be a landlord. It has been a real trip with lots of stories but it certainly has given me financial rewards that I also enjoy. My motto is work hard, be a good landlord and sell when the price is right.

  6. We bought at 20, so I know exactly how you feel and what you mean! We found a great deal and it was just too hard to say no.

  7. I think you are never too young, although at this age life changes quickly, but you bounce back easier. I bought at 22, and was happy I did as it helped build wealth. A few friends got a house bought by their parents for college, they paid the mortgage and it was lower than college rent, I thought it was an awesome idea since you’ll be around for 4-5 years anyway.

    • That happens here all the time. We see parents buying up houses just so their kids and their friends can get cheaper rent. When the kids are done they rent to the next batch and so on. A gold mine for many.

  8. I was 26, and it was one of the best purchases ever. I wasn’t a fan of landlords, and it just made sense. I would say buy as early as you can as long as you buy within your means.

  9. Christine Weadick says:

    We bought our first house a year after we were married. Hubby was just turning 22 and I was 21 at the time. It was an education to say the least. We had no clue about closing fees and such but some how muddled through. We had no children at that point. Two and a half years later we bought our second house and rented number one out for a few years before selling it. This was the time when interest rates were going nuts. Hubby had guys at work laughing at him for locking in at 13% on the mortgage for number 2 but I guess we had the last laugh as a year later they were crying the blues because they were renewing at 19-20% for theirs. We were 6 years in house number 2 and 6 1/2 years in number 3. We’ve been 21 years in the current house, number 4……

  10. Sean McNulty says:

    great post. It was as if i wrote it myself :)

  11. I’m seriously impressed because I remember being 21 and I can’t imagine being mature enough to own something. I wish I would have learned about all that earlier because I think it would have been possible, at least when I moved to Seattle, and almost did buy a condo around 28 or so, but it never happened. You sound like you were raised by incredible parents!

    • Thanks Tonya, Yes they are amazing parents. I think since they owned their own houses and a couple of businesses one of which I ran for a couple of years on my own it helped me to grow and mature especially when it came to money and responsibility as an adult.

  12. Great story and great advice!

    We’re in a situation where the rent is cheaper than the mortgage+property tax+strata+maintenance by around $700 a month where we are living so renting it is for us for the time being.

    We’ll buy sometime in the future and it’s great to know that there is knowledge and resources here for when that time comes! Cheers!

    • Thanks Mate! I find since moving to Canada that times aren’t like they used to be. Prices of homes have gone through the roof, even back in the UK. That’s why I made a nice profit on my house sales. It can still be done as long as you find the right property. Thanks for sharing mate.

  13. studentdebtsurvivor says:

    I bought my first place at 29. I’ve always had a strong interest in real estate and real estate investing. I’m not quite in the investing phase yet, but I’ll get there soon. I don’t think there’s “too young” for being a property owner-as long as you can afford the payments. As you’ve pointed out there are a lot of good lessons in owning your own place.

  14. My brother bought his first place at 18 in 1997, after dropping out of high school and working full time for a year. He assumed the mortgage for $27k with a payment of $400/mth. I moved in a year later and started paying rent. We picked up 3 more roommates and essentially turned it into a solid income generator for a few years.

    I realize opportunities like this don’t exist anymore, but buying the house was one of the best financial decisions he ever made! I don’t envy first time home buyers today though… it’s a different market all together.

    • I agree, that’s exactly how I got into the market but I didn’t rent out any rooms. That was smart of him and I’d do it if my place had more than one room lol. My house on the other hand did but I didn’t rent them out either. Today prices are through the roof, not like they used to be.

  15. I bought my first house at 27 and my most recent one at 37. Hopefully this is our last home :)

    Never say never.

  16. I dont think you were too young you just made a few mistakes. Heck even if you were 40 you could have made those same mistakes. You learn through experience and I bet when you brought the house with your wife it was a lot better experience. I am still trying to get into real estate to build up some rental properties for income. Having an emergency savings has saved us more than a few times. Heck just getting our home recently required us paying all closing costs. Completely unexpected.

    • Yes, the experiences helped us both out and we are still learning. Once we save up enough, do what we want to do and top up investments we will look at an investment property. So much to think about once the house is paid off.

  17. Very impressed that you managed to purchase your first home so young! We’re keeping our eye out for mortgages, I think the tricky bit is saving up for a big enough down payment but not waiting too long wasting money on rent!
    Out of interest, what spurred your move from the UK to Canada?
    Joe @ Budget Breakaway recently posted…Amazon or Ebay – Side Hustles Week 3 of 4My Profile

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