Buying a House at 20 (How I did it)

Buying a House at 20 (How I did it)Hello! If you are new here, please take a look at my about page. Here on MakingSenseofCents, I talk a little about everything. My more popular posts are usually about how I quit my day job to pursue full-time freelancing. I now make over $10,000 a month online, which I fully detail in my monthly business income reports.

Buying a house at a young age is a topic I am often asked. Whether you are planning on buying at house at 18, buying a house at 19, buying a house at 21, or any other numbers, it is a big deal.

We bought a house at the age of 20, there I said it. Most people think we are crazy and either think the house is something dumpy, that someone in my family pays for it, or that I’m lying (yes I’ve been told that). I am often asked how I bought a house so young and what I learned from it.

I am especially asked a lot of questions now about what I learned from it since a lot of my friends are buying their first homes right now.

So, I’ll start off with a little background: Why did we buy our house at the age of 20? I was still in college, and we both didn’t have the greatest jobs. However, we were both working full-time and made slightly enough money. There are sooo many things to learn and know about before you buy a house.

We started living together straight out of high school (yes I know I will be judged by some for this, but oh well, I am happy :) ) and had lived together for a little over 2 years when we finally started looking at houses.

Now why were we in a rush to buy a house? Well we were really outgrowing the house that we were renting. The rent was super cheap since we were renting it from one of W’s relatives.

The house wasn’t bad and there was a huge backyard for our dog (we had one at the time). However, the house was super small (there was no legitimate bedroom, our bed was in the basement) and then of course our neighbor turned out to be a psychopath.

Long story short, we moved just in time. The person who rented the house after us ended up being murdered by the psychopath (our old landlord was W’s cousin, and he told us this). Probably too much information to put on the blog so I won’t say too much more. I will just say that we moved out at the perfect time.

We left the rental house as soon as we could because things were getting out of hand with the neighbor. We moved in with W’s brother and sister-in-law. We couldn’t live with them for too long though, mainly because they had 2 kids (they have 3 now), and we had a dog with us! We just wanted to find a house quickly, and moving into an apartment and signing a lease didn’t seem worth it.

We gave his brother and his wife a couple hundred in rent, so we weren’t freeloading (we lived in the basement bedroom).

So there we were, on the hunt for a house. We knew we didn’t want to rent anymore, and at the time we kept being told that the housing market had bottomed and that prices would never be this cheap (oh boy they were wrong!). So we found great deals on houses and there were a lot that we loved. We also had to keep an eye out for home insurance.

We found a house. It was a little above our budget, but still well below what we were approved for.

What I would have changed:

1. The timing.

Even though everything worked out great for us, I’m not sure if I would have bought a house so young. We probably should have continued living in the house we rented for a little longer so that we could have saved money.

Also, even though we are still together, I do realize that a TON of relationships at the age of 20 do not last, I am happy that ours is still going strong of course.

2. Being more realistic.

I’m definitely not going to say that I made NO mistakes. We bought our house with the thinking that I would get a job straight out of college (I graduated with my undergraduate degrees around 7 months later, still at the age of 20).

However, what if I WOULDN’T have gotten this job? We most likely would have not been able to afford it forever. We had enough saved to hold us over for awhile, but we definitely couldn’t enjoy ourselves on the income that we were making (we had enough for expenses, but not if we wanted to hang out with friends or buy clothes).

3. Waited so that I could travel.

This isn’t a huge regret of mine, but I do always have this little inkling that maybe I would have travelled extensively if I wouldn’t have been tied down to a house.

 

What decisions would you have changed with your house purchase? Tips?

Do you already have a second house in mind like I do?

 

Comments

  1. DC@Young Adult Money says

    I would have factored in the little costs of our house. We bought one that we could "make our own" and do small renovations/changes over time. Then I realized it costs $600 to replace all the doorknobs and locks….and we still want to replace all the doors! There are just a lot more costs involved than most people think. I've written about it a bit but hope to more in the future just so people are aware of the potential costs involved once you do purchase a house.
    My recent post How Networking Can Benefit Your Career

  2. Allison says

    Wow!,Michelle,some of the craziest things have happened to you!
    I was so immature at the age of 20, and would not have been able to handle it.
    Good for y'all.

  3. Jordann says

    That's amazing! I can't even fathom buying a house at such a young age! Once I get out of debt, I think I'll start saving for a house, but I probably won't be ready for another five years or so, you've definitely got a head start over me!
    My recent post My Debt By Numbers

  4. Grayson@Debt RoundUp says

    There is nothing wrong with purchasing a home at an early age as long as you know what you are getting into. My wife and I purchased our home before we were married when we were 23, so not too far from you. We are looking at selling it now to move to a better neighborhood to raise our son.

    • MakingSenseofCents says

      Yes it is in both of our names. I know I will be judged for this but I believe that marriage is nothing more than a piece of paper (I am not religious) and getting married wouldn't affect us in any way.

      Hopefully no one hates me for saying that! But it's just how I feel when it comes to our relationship. A wedding wouldn't make it any stronger, as I believe our relationship is already great.

      My recent post Buying a House at 20 (How I did it)

      • Leslie says

        I absolutely agree with that about marriage. But buying a house is such a huge thing, I don't know, I would want to wait 10 years or something stupid before I felt comfortable enough to do that! I guess now would be different too since I've had some serious long-term relationships end, I would just be more hesitant about it.

        but that doesn't matter because things are working out for you!
        My recent post 2012 Reads Recap: history, fiction, comics oh my!

        • MakingSenseofCents says

          I agree, we definitely bought a house very early in our relationship (we were only 20 and had been together for a little over 3 years at the time). And haha I think it just depends on the people. It's funny because in my group of friends, ALL SIX of us have bought a house with our boyfriends (the last one just bought a house) and we've all been dating with our respective boyfriends since high school. It's weird how we are all alike.
          My recent post Buying a House at 20 (How I did it)

  5. Christopher @ This that and the MBA says

    We kind of fell into our house…we wantd to move out of our rental we were in…this guy was renting the house we ended up buying…so we bought the duplex and rent out the top now…its nice income and it covers our mortgage..it was a no brainer for us…considering my wife wasnt working after our first child….kudos to you on your relationship and purchasing the house..

  6. CrazyTragicAlmostMagic says

    There's no way I could have done this at 20. Was not in a "good place" in life at all. Floundering I suppose. even now, I'm still dealing with some consequences. Someday i hope to own a townhouse at least.

  7. Probably Rachel says

    My husband and I were 23 when we bought our house after only renting an apartment for a year. In the prime location between our two jobs rent is high and it killed us putting that much into a place we didn't own. Buying a house in your 20s leads people to believe that it's tiny, a fixer-upper or that it's in the family. I can't tell you how many people have been surprised to see our big, definitely not a starter home (or pictures of it).

    We know that this is a 5-10 year home and that we'll want to move into something bigger and probably newer later in life. But right now I love my charming home.

  8. Brian says

    Yeah, I'm with everyone else… that murder part of the story is insane! But it does make for a good conversation starter!

  9. John S @ Frugal Rules says

    Wow, murdered!? One of our first places we lived in had been previously used as a crack house/brothel, but no murder. :) Seriously though, that's great you were able to buy a house so young. So many at that age aren't disciplined enough to take on something like that. If I could change one thing about our purchase I would have waited longer in order to save up a bigger down payment.

  10. Budget & the Beach says

    I can't believe that story of the next tenant being murdered. wow! Well, I have never owned anything and I'm 42. But I have no regrets and I have, in my own mind, have experienced living in multiple places where I could experience different things, and different experiences living with people and on my own. I think I would like to own something someday, but in LA it's pretty tough, especially under my current financial circumstances. If I lived in the Midwest, I'm sure I would have bought a house a long time ago. That's quite an achievement at 20!
    My recent post Week in Review 12/11/12

  11. RichUncle EL says

    I may have missed this but was it easy to save up for the downpayment or did you have it already when you turned 20? By me a downpayment for a decent house is about 50K. Nice redesign by the way!
    My recent post Brands that I Love – Series III

  12. therandompath says

    That's great that you were able to purchase a home at the age of 20! I think back to when I was 20, and there is no way I was mature enough to buy a home.

    OMG, the murdered part of your story is creeping me out!
    My recent post Caramel Apple Cookies

  13. Kate says

    20 years old is impressive! I was 23 when I bought my house, all on my own. My dad bought his first house at 21 so my family didn't think I was too young, but I think some of my friends did. I'm glad home ownership has worked for you and that you weren't murdered!

  14. iheartbudgets says

    Screw all of the details about finances, being too young, whatever…..if you didn't move, you wouldn't be here. HOLY MOLY!

    I would gladly "buy a house too young" than hang around and get murdered…WOW!

  15. Frugalista Married says

    High school sweethearts! That is so cute. It's nice to know that some of those relationships actually work out. I can't believe you escaped a murderer! As for the whole house thing. I'm on my 2nd one and I'm still on the fence about how good of a choice it is to buy! My one word of advise is to buy one that you can grow into or don't buy at all. Don't buy a 1BR bungalow that you'll grow out of in 2 seconds and find it hard to sell. It just doesn't make sense unless you know for certain that you will live alone for the rest of your life. I thought I would…but apparently I was wrong so my 1st one did not work out for me which became US at all.
    My recent post X-mas Tree :: X-mas Shopping Done

  16. debtandthegirl says

    My boyfriend was 21 when he bought his house that we currently have. When I met him, he was still living in it. Then the market crashed and we tried to put it up for sale. It didn't sell so we did extensive renovations and put it up for sale again. No luck in selling it a second time. Then we smartened up and started renting it out and its been (mostly) a good experience ever since. If a house was something you could and still can afford, then it can be a great investment even at such a young age. Don't let people bring you down just because you were young. It seems like it worked out well for you.
    My recent post Why You Should Be Careful in Where You Volunteer

  17. Lisamarie says

    Oh I love this! Wow you were ambitious. I bought my condo at at 26. I did it before I was married and solely on my own. It was a goal of mine, having been raised by the most amazing single mom ever. Anyhow, I bought just about the only place in my hometown that I could afford and that wasn't totally pee stained and nasty by the foreclosed owners. Mine was an easy short sale. ( I say that seriously.) And it is of course now way too small. But I don't regret the purchase. I will keep it always and am starting in January to save up for house #2! I just have about, oh, um, three years to go. If I'm lucky! Hahaha.
    My recent post December Mornings

  18. Shannon-ReadyForZero says

    Since I have a habit of moving to expensive cities (first New York and now San Francisco) I'm not sure that I'll ever be able to own a home. In New York less than a million would get you a shoebox and in San Francisco it's even worse. It's definitely frustrating to think that I may not be able to invest in a property and make it my own, but at this point I'd rather pay off my student loans and save for retirement than think about how I could even begin to afford a home where I live. By the way, that story about your neighor murdering someone is insane! Thank goodness you guys got out of there when you did!
    My recent post Introducing Two New Resource Centers… for Career Tips and Relationships/Money Advice

  19. plantingourpennies says

    What's with all the stories of murder on the blogosphere today? Holy cow!

    I'm glad it worked out for you, but at 20 I was still struggling to figure out my place in the world. I'm glad that we waited until we were about to be married to buy our first house.
    My recent post Duplex Valuation – A DCF Example

  20. Pauline says

    Crazy story! I bought my first flat cash at 22 just before I graduated college. It was super cheap because of the bad neighborhood and I rented it while I traveled the world. Best of both worlds! I would never have bought with a BF though, or would have gotten married I think.

  21. SingleMomsIncome.com says

    I don't think I was mature enough at 20 to buy a house. It is very impressive how good you were with money at such a young age. I am not going to consider buying a home until I have a substantial amount saved, I have become a worrywart these days.
    My recent post How Not to be a Quitter

  22. Canadianbudgetbinder says

    I don't think your crazy because if I did then I would be too! I bought my house while I was still in University and working as well. I as paying more for rent than I did owning a home so it made sense to me. I sold that for a nice profit then bought another house a few years later, just bigger and better. I sold that house made a bigger profit and moved here to Canada and then bought this house with the Mrs. I'm only in my 30's and the house is pretty much paid in full.. ok well we have the cash and will be paid in the new year. I had to start a whole new life here in Canada, go back to school as my Uni Degree wasn't fully recognized (surprise) but we did it and not one handout in our lives. Mrs.CBB bought her first home at 29 I believe but has always been a saver. We have lots of fun together, go on trips and enjoy life. No debt, 2 vehicles full paid and it's because we both started saving money when we were young. If someone thinks that's crazy then so be it but I'd do it all over again in a heartbeat. Now all we need is the kids :-) I say keep reaching for your dreams mate… you have probably more knowledge than I did at your age!! Great Post. Mr.CBB
    My recent post Winter Vehicle Maintenance… Costing You Less In The Long Run

  23. @PlungedinDebt says

    Holy cow, that's pretty terrifying! We were on our early 20's when we bought our house, married for a year. My sister-in-law and her BF just bought a house in april, they're only 22 (she's graduated university and working FT though). The market is too appealing. They pay less for their mortgage payment then their rent.
    My recent post Fun and Frugal Dinner Parties

  24. Crystal @ PET says

    We bought early too, so no judgements from me. :-) Hubby and I met at 18, got married at 21/22 (I'm 6 months older), and bought our first home at 22/23. In Houston, TX, it just made sense. Either $700-$1000 for rent in an apartment or $740 a month for a 15 year mortgage. Even with property taxes, we were paying less than $1000 a month. After refinancing in 2011, we were paying less than $800 a month.

    Since the payments were so low, we used 2011 to make a huge dent (only $23,000 left) and we bought our new house at age 29. So now we have another mortgage, but we'll be down to one next year and we couldn't be happier.

    Sometimes you just know and it doesn't matter how young you are.

    PS I am so glad you moved in time and I feel so sorry for the next renter…
    My recent post How To Throw A Lavish Holiday Party On A Tight Budget

  25. Justin@TheFrugalPath says

    I suppose there's nothing to make you purchase a house like living next to a psychopath.
    I'm glad that everything has worked out for you. We bought our house when we were 24/25 so I don't think 20 is too bad. Some people know what they want at a younger age. I've been with my wife since I was 17 and she was 18. Sometimes it's good to keep a good thing, or in this case person.
    My recent post Finding Your Path To Financial Independence

  26. I Love Being Online says

    Let me say, "I really love your blog and I'll definitely be coming to visit again." =)

    Well, I'm 21 and I have bad credit. I need to repair it in order to buy a house just yet. However, I am renting and it does suck. We have a one bedroom apartment on the top floor. Although this is not my dream place – it will do for now. Until my company earns me thousands and then millions of dollars — that's when we'll purchase a home. :D

    But hey.. if I were you – I think you did a good job. Buying a home is a huge investment but its a good one. It's your own. You never have to worry about being homeless for sure. Haha. =)
    My recent post Life is Too Short

  27. Sandra says

    Well, I got to say you got a lot of courage buying a house in 20s. I am in my 30, has a job, but thinking again and again and I am not sure If I should do it.

    Not that my rent is cheap ( It is pretty high ) but i hear from people who own houses there is a lot of maintenance around, you end paying as much as rent.

    • Michelle says

      We don't regret out house purchase. We pay around $960 a month and that includes the mortgage, insurance and taxes. It's not bad at all and if we wanted to ret a house like ours it would probably be around $1,500 per month.
      My recent post Carnival of MoneyPros

  28. Marci says

    I'm also 20 years old. We have already had 2 apartments. Our first apartment was 575 on month and our second is 775. So I do believe we can stand a mortgage a month. I know a lot of people have to issue with and concerns with us being so young. My boyfriend and I will be together for 3 years. I am meeting with a realtor tomorrow. And I'm very nervous because of the post I'm seeing about waiting. I just think its a complete waste to pay this much for an apartment that isn't even mine. Any advice?

    • Michelle says

      You sound like a lot like us. It really just depends on what you're comfortable with and as long as you see value in it and can afford it. By the time we bought our house (the same one we live in now), we had lived in 2 or 3 places as well and new we wanted to buy.
      My recent post Carnival of MoneyPros

  29. Cody says

    Wow that’s awesome! I bought my house at 20 as well, just turned over a huge profit and am buying a second home at 21! Hard work pays off, and so do great careers huh!? Too blessed to be stressed :D

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