Many people think that young people today don’t want to buy homes because of their love of freedom, travel, and experiences, but data shows that young millennials actually make up the largest generation of home buyers to date.
Are you an aspiring homeowner? You might wonder if it’s the right decision for you, where you should buy, what type of home will suit you, or even how to save money for a major life purchase. I bought my home when I was 24, and later, became a licensed real estate agent. Here are six key lessons I learned that will be helpful as you plan to buy a place of your own.
You might want to buy your dream home right off the bat, but it’s okay if your first home isn’t the one you’ve always imagined. When I bought my first home in Los Angeles, I knew that my “forever home” was well above the price range I could afford at the time.
It’s important to be realistic about what you can afford, and I learned that if a house is in liveable condition, there are plenty of cosmetic upgrades you can do with your own time and budget. While rental properties often feature flooring or hardware that’s designed to withstand wear and tear, homeownership will give you the freedom to make design changes. Small updates like fresh paint and switching out light fixtures can make a world of a difference.
I’m a goal-driven person and once I have an idea in mind, I won’t stop until I’ve accomplished it. Age is arbitrary, but I was just determined to buy a home before I turned 25 and gave myself a personal deadline. While I didn’t doubt that I’d want to get married one day, I hated the idea of not being able to reach my goals independently. So, I bought my first home at 24.
I’m glad I didn’t wait to take my financial future and dreams into my own hands because there really isn’t a bad time to buy a house. In fact, it’s actually the opposite—waiting too long to find a perfect home can mean you miss out on great opportunities. When you own a home, renting out rooms can help you keep payments low, and you can always do something differently if you decide to get married and have kids. I eventually moved and became a landlord by renting out my first home. Being able to make an income from the property allowed me to purchase my next place.
Up until the time I bought my first home, the most expensive purchase I had made was a car. I didn’t have established credit, so I had to get my dad to co-sign on the financing for me. Because I’ve always been fiercely independent, I researched financing and credit scores and did everything I could to quickly pay off my car. This early experience taught me to think about making smart money decisions for my financial future.
Homes cost more than cars, but unlike cars, they hold their value. Real estate markets are cyclical (and they do experience some downturn), but even when the market hits a low point it always swings back up again. Paying a monthly mortgage is likely equal to what your rent payment might be; but with a mortgage, you’re paying down a loan on a property that you own—and could potentially sell one day. Buying a home is an investment, and it’s a good one.
If you’ve started to think about buying a home, it’s a great idea to keep tabs on what prices they’re selling for in your desired neighborhood. House prices can fluctuate and sometimes may sell above or below the listed price. It’s always good to know what’s out there so you can successfully plan and save money.
Once I set my goal to buy a home before I turned 25, I knew I would need to cut back in some areas to save more. Using apps can make sticking to a budget or saving plan much easier. I use Mint to track bills and spending, and I still transfer money to savings with my online banking app whenever I can. If I stay in instead of having lunch out, I gift myself the amount I would have spent. Small transfers are easier to stomach, and they add up quickly!
If you’re starting to think about buying a home, you might have a few ideas about the style or your desired neighborhood. It’s good to have a vision, but I learned that being open-minded is key to successfully finding a property to call your own.
When I first started looking, most of the homes within my price budget were fixers in need of repair. I very quickly adjusted my search to include condominiums and by doing this, I found that I could not only afford a larger space but an upgraded kitchen—along with great building amenities.
You might have heard that buying a home is all about location, and I learned first-hand that this is true. When you’re looking for your first home, it’s important to note that anything inside of your house can be changed, like the kitchen countertops, floors, walls, and layout. On the contrary, the one thing you can’t change is the location. The best investments are the smallest or worst homes in the best neighborhoods, not the nicest house in a bad neighborhood.
When I was searching for my first house, I found a great condo in the Arts District near Downtown Los Angeles, which was an up and coming neighborhood. I liked how quiet the area felt when I first moved, and over the next few years, it became one of the city’s trendiest neighborhoods. As destination dining and cool coffee shops started popping up, my property increased in value. The location should be your top consideration when shopping for a new home.