When to Buy Your First Home?

I have previously mentioned that I own a property in my hometown, and today I would like to tell you a story of how I stepped up onto the property ladder at the age of 21 and whether this is something I regret doing.

My parents have always been opposed to the idea of renting and strongly believed that one should own their home. They were born during the Soviet times in Russia where renting was a foreign concept (and to some extent it still is). It became more popular to rent after the collapse of the Soviet Union, but the views of the older generation have not changed. Same as not going to university after school, renting was never an option. Although my parents have also been opposed to the idea of taking out a mortgage to fund a home purchase, this was the only type of borrowing that they could justify. The times have changed and unless you had millions in cash lying around the only way you could become a home owner was to take out a mortgage. So I did.

I was lucky enough to buy my first home in 2005 (just before the credit crunch) when property prices were still very reasonable and relatively low. I ended up buying a spacious one-bedroom apartment in a new luxury apartment block in one of the nicest neighbourhoods in the city and within 15 minutes walk from the beach. Now, I do have to admit that my parents helped me step up onto the property ladder by lending me the deposit money which was 15% of the apartment price which I had paid them back within the course of two years. My original mortgage period was 28 years which means I have still got 20 years to go before the mortgage is paid off (unless, of course, I change my mortgage repayment plan in a couple of years’ time and start making accelerated payments).

I did not get to live in my apartment for long (let’s just say I was meant to return home after finishing university in London, but this has never happened) and as some of you may already know from my previous posts I am currently renting it out. The rent I get from my tenants not only covers my monthly mortgage repayments but I have also got some money left over and as from next month I will start putting it into my very own savings account (yes, I have finally opened one of those *patting myself on the back*). My apartment is now worth almost two times more than what I had originally paid for it.

I guess what I am trying to say is that this purchase turned out to be a very good investment and if you ask me whether I have any regrets buying a house at such a young age, I will say “no regrets whatsoever” without hesitation. Looking back at my financial life throughout the years, I can honestly say that buying a property has been my best financial decision so far. Buying a house at 21 may not be something I would necessarily advise on doing, but I am glad I did and there is a place I can call home!

I would really like to know what you guys think about buying your first home. Do you think there is such thing as an ideal age for first time buyers?

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14 comments

  1. Are you going to continue renting the place or eventually sell it? I don’t think there is an ideal age. I’m 42 and have never owned anything but due to where I live, then life circumstances (getting laid off) it makes it a pipe dream for now. If I live somewhere else and have a more stable income, then I’d eventually like to own.

    1. I will continue renting it out as it’s a source of extra income. Of course I could sell, pay off my debts and still have money left to use as a downpayment on a house in the UK but I am not sure this is the route I want to take. I am not ready to buy again just yet, but in the ideal world I would like to keep my flat back home and save up for a downpayment on a house in the UK. One can dream, right? 🙂 I bet real estate in LA is expensive! I rent in London too and truth be told it is killing me sometimes to think how much money is going down the drain… At least when you have a mortgage you are paying for something that will eventually be yours. I guess I’ve adopted my parents’ mentality on this subject 🙂

  2. I think you hit it on the head that there are different ideal times for different people and their situations!

    Personally, for us, while we have the resources to purchase our own place right now (with a mortgage of course :P) we are choosing to rent because we enjoy the freedom that comes with renting. We plan to purchase a home when we are closer to having children (which isn’t for a little while yet). But than again, plans could change 🙂

    I’m glad your investment in real estate has been fruitful and successful at such a young age!!

    1. I can see where you are coming from regarding the freedom of not owning, I can relate to this. Although I’ve lived in London for many years and I love this city, I am still not sure if this is where I see myself in 10 years. It is too big of a commitment to buy and then move across the Atlantic 🙂 On the other hand, one can argue you can always sublet but there’s no denying it’s a bit of a hassle. Either way, there is no right or wrong, whenever one is ready.

  3. I have never owned anything, but have moved around A LOT. If I had owned, this may have been more difficult. That said, I think it’s fantastic that you have this investment and I think you have set yourself up to be in such a great position at a relatively young age. When I think about how much I pay in rent now, I would feel MUCH better about using it towards my own mortgage rather than my landlord’s. But all in good time… First, I have to get rid of my debt! 🙂

    1. I feel the same way about my current living situation where I rent and like you, I’d much rather use the money towards my own mortgage than someone else’s. I’ve done the math recently of how much rent I’ve paid over all these years in London and I felt sick. But I do agree with you on “all in good time”, I love this saying! For now, getting out of debt is definitely the main priority! 🙂

  4. As to the ideal age, to me it’s probably when you’ve saved the deposit. IN Australia, it’s increasingly hard for rent to cover the mortgage, so the discipline of saving the deposit (and not spending on other things) helps when you come to have mortgage repayments. You’re so lucky/blessed to have it go up in value so quickly AND the rent cover the mortgage! And I think the magic “30” is as good an age as any, but it depends on how much time was spent studying (and therefore not really earning). I bought when I was 26, just, I think.

    1. Thanks for your comment, Sarah! I agree on the deposit aspect, I think it would’ve been better if I’d saved the deposit myself, this would’ve probably helped me understand the value of money better! Unfortunately, I had to learn the hard way.
      Luckily, the rent I charge has always covered my mortgage repayments and I’ve never had to worry about making additional payments towards it. It’s a shame it’s not the same in Australia!

  5. I purchased my home in 2007 right before the crash/credit crunch, etc. My purchase is similar to yours in that I purchased low in a great area. I am still living in that property and will be making some cosmetic renovations soon. Once I do that I will rent it out and more than pay for the mortgage and carrying costs for the property. It has appreciated and is almost twice its original price (allegedly). I don’t think that there’s a ideal age so much as an ideal mindset. There is no way that I would have purchased a place in my twenties because I was all over the place. Literally-I was traveling overseas a lot. And figuratively, I was “finding myself!”

    1. I am glad your first home purchase worked out so well for you too! In terms of renovation, my apartment is only 8 years old (I bought a new built property and designed it myself which was so much fun!), so it doesn’t really need any renovations just yet. Since it’s a rental property at the moment and if I ever decide to move back home, I will definitely renovate and start afresh! Renovating sounds fun, I’m very much into interior design! 🙂

  6. That’s awesome you were able to buy your first place at such a young age and have turned it into a rental/investment so soon. House/condo prices in Vancouver, BC, Canada are some of the most expensive in the world so I don’t see myself owning a home for a long time. But I’m lucky my bf just bought one so we are moving into it August 15th 🙂

    1. Thank you Wendy! 🙂 I’ve heard Canada is expensive to buy real estate. London is extremely expensive too, you’re looking at £13000/sqm (that’s the amount of my debt at the moment, I could’ve got myself one sqm of an apartment in London instead, haha!). When I am ready to buy again (not for another 5 years for sure), it will be outside London with an easy commute to central London for work. It’s cheaper to buy and better for a family life, I can’t see myself bringing up children in London. Congratulations on moving in August, you guys must be so excited! 🙂

  7. That’s great that you bought at the right time – and have hung onto it so far. My hubby and I bought our first house in 2003 but after swapping mortgages and moving around a couple of times, we haven’t yet made any money. We haven’t lost money either thankfully! I think you’ve got a brilliant investment there. 🙂

    1. Thank you! I am glad I did, the timing was perfect (just before the credit crunch) and my property value has since almost doubled in price which is great news! I think it is rare when you lose money on real estate (obviously I am not an expert and speak from my own experience and observation) and over the years the property value is likely to increase.

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