How To Buy A House At A Young Age

It’s no secret here on Making Sense of Cents that I am a homeowner. However, what some people might not know is that I bought my home at the age of 20. Yes, I was TWENTY YEARS OLD. I know this isn’t the norm for most people, and I know that just because some are…

Michelle Schroeder-Gardner

Last Updated: June 20, 2023

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Find out how to buy a house at a young age. This is a great list!It’s no secret here on Making Sense of Cents that I am a homeowner.

However, what some people might not know is that I bought my home at the age of 20.

Yes, I was TWENTY YEARS OLD.

I know this isn’t the norm for most people, and I know that just because some are able to do it and make it work doesn’t mean that it’s for everyone. Most of my friends bought homes when they were around my age as well, so maybe it’s a St. Louis thing? 🙂

Anyway, we both had okay full-time jobs at the time. Buying a house at a young age was possible for us.

We moved into our home in October of 2009, and I graduated in May of 2010, so we did buy our home thinking that we would have a higher income coming May 2010. Luckily, that worked out in our favor, but I don’t think I would ever recommend buying on an expected higher income unless you knew for sure (150%!) that it would happen.

We bought in 2009, when there was the $8,000 first-time homebuyer tax credit and when the housing market was cheap for buyers. Also, buying a home where I live is cheaper than renting, so that was something that definitely influenced us.

Before we bought, we were renting a house (for super cheap – like $350 a month, if I remember correctly) but had to move because we had a crazy neighbor who had the SWAT team at his house on a monthly basis and he started to threaten our lives as well (some of you know exactly how that ended – not good at all).

Also, I found a snake in my bed one night (yes, an actual SNAKE!) and I was pretty much scared to sleep in that house ever again because of the neighbor and the snake.

Even though we were both very young, houses were a steal at the time, and we needed a new place to live.

Here are my tips to help you buy your next home. If you want to buy a house at a young age, or any age, there are things you might want to think about.

 

Do you actually want to buy? Or should you rent?

Before you decide that you absolutely want to buy your next home, you should stop and think about the positives and negatives of both home ownership and renting. Not everyone is meant to be a homeowner. And not everyone wants to rent.

Some different things that you should think about include:

  • Do you want to travel a lot? If you want to travel, then having a permanent home where you have to pay the bills even if no one is there may be a waste of money for you.
  • Do you plan on moving for your career? If you are young, then you may still be early in your career and you may decide that you want to leave your home city one day. I actually was offered a position right after I graduated from college (around 6 months after we bought our house) and they wanted me to move. Luckily, the position kind of sucked and the town they wanted me to move to sounded absolutely horrible (I think there were around 100 people that lived in the whole COUNTY of where the position was located) so I didn’t give the position any thought.
  • How’s your credit? If you are young, then you may not have even established any credit. It would be very hard, if not impossible, to buy a home without a good credit score.
  • Do you have time and/or money for home maintenance? If you own your home, then there will be home maintenance that goes along with it – it doesn’t matter if your house is new or old, stuff happens. Something may break, grass needs to be mowed, and so on.

 

What kind of home do you want?

Each person is different. Just because the “American Dream” is said to be a suburban house with a white picket fence, doesn’t mean that it’s everyone’s dream.

You should really think about where you want to live and what kind of home you want.

  • Do you want to live in the suburbs? Maybe you want to live right on the beach? Or is city living more for you? Or do you want to live far away from everyone and live 20 minutes away from the closest grocery store?
  • Do you want a house, a condominium, a townhouse, a duplex, a farm, or something else? Maybe you want to live on a boat? I don’t know! There are so many different options out there

 

Find a realtor.

If you are buying a home, please find a realtor! I have met a few people who think that they have to pay the realtor if they are a potential homebuyer. That is not true.

The realtor receives a commission from the seller, at no cost to you. Or at least this is how it is in the United States. Can others in other countries chime in about this?

There are many positives of having a real estate agent. They can help you negotiate (they are professionals at this), they can help you find the perfect home for you, they have experience in buying homes, and they can help you with all of the paperwork that will need to be done (and trust me, there is so much paperwork!).

 

Think about the total cost of the home that you want to buy.

This is something that some/many people do not think about when they buy a home. When you buy a home, there are so many factors that go into how much a home truly costs.

These include:

  • The home price. This is the number one thing that potential homebuyers look at, but don’t forget about the below!
  • Utility bills. You would be surprised to see how much utility bills can vary. One home may have utility bills of $200, and another may have utility bills of $700. You should be able to get a detailed past expense list or at least a realistic estimation of how much utility bills will cost you for that specific house from the current homeowners.
  • Private Mortgage Insurance. If you didn’t put a 20% down payment on your home, then you may have to pay PMI.
  • Property insurance. Insurance can vary greatly depending on where you live and what type of home you have. I pay around $700 a year for property insurance, but I know others who pay over $2,000 a year.
  • Property taxes. This can be a rather large amount of your monthly mortgage each month. I pay around $150 each month towards property taxes, but I know others who pay over $500 each month (and that is just crazy to me!).
  • Maintenance. Things will break in homes, like I said earlier. Also, you may need to paint eventually, mow the lawn, buy more efficient appliances, and more.

 

Rent out a room in your home for some extra money.

I wouldn’t recommend buying a home unless you can truly afford it. However, if you are young and there is plenty of extra space in your home, then it probably wouldn’t hurt you to rent out some of that extra space.

Renting out a room in your home can add an extra few hundred dollars to your income each month, which can be really helpful if you are a homeowner.

We have four bedrooms in our house and we only use one (our bedroom). So when my sister needed a place to live a few years ago, we invited her to live with us. It’s been working out very well. She’s been living with us since May of 2012 and pays around $325 per month.

We also haven’t really noticed an increase in any of our bills, but with some renters you may notice that. It’s always a good idea to try to estimate how much things will increase, wear and tear, and more in order to see whether renting a room in your home is worth it for you.

You can even rent out your closet or driveway. Learn more at Neighbor Review: Make Money Renting Your Storage Space.

 

Is it a good idea to buy a house at a young age?

There are many things to think about when buying a house when you’re young, such as:

  • How long do you think you will live in the area?
  • Can you afford the house?
  • Do you want to travel?
  • Do you plan on having a family?

And so on.

Buying a house in your early 20s, or whatever you consider to be a young age is possible, but you’ll just want to be smart with your decision.

What advice would you give to someone looking for a home? Is there anything that you wish you would have done differently when home shopping?


Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. I can’t believe you found a snake in your bed when you first moved in. Do you know how freaked out my wife would be if that had happened to us? I don’t think she ever would have came back in the house!

    1. The snake was in the house we rented, not the home we bought! We found the snake right before we decided that we needed to leave. It was horrible and I could no longer sleep in that house!

  2. If I found a snake in my bed I would have freaked and never gone back!
    I think I was just too immature at twenty to have purchased a home , but I think you are so mature and money wide that you made the right decision.

    1. Thank you Allison! I really thought that people would call me immature to leave a rental house because of a snake in the bed. It seriously kept me up at night and we even moved our bed into the living room after that LOL

  3. Very cool. I was actually 20 as well when my wife and I bought our first home. Unfortunately we bought a few years before you did so we didn’t have the home buyer credit available. In retrospect I wish that I had known more about basic home maintenance before owning a home. Having a good basis in systems (Electrical, Plumbing, HVAC) goes a long way, as well as general carpentry skills. For most people who buy a home at a young age the odds are they are buying a home that is older and will need repairs done to it at some point. I was lucky enough that my dad had taught me some stuff and I had access to his tools, but if I could have changed anything about buying that first house it certainly would have been my knowledge level going in. It is no fun to learn as you go when a pipe bursts at 3AM or the electrical panel is sparking.

    1. Glad to meet another person who bought young. We’re not all crazy! ๐Ÿ™‚

  4. Great post, Michelle. I bought a home at a relatively young age and I think the biggest thing to think about is that there is no “perfect” time to buy a home. I was just talking to a friend yesterday who works at the same company as me and he commutes to California Monday through Thursday (from Minnesota). It was an opportunity that came up after he bought his home and is only temporary for a project he’s on, but you could have argued it was a bad idea for him to buy a home if he’ll be gone over half the week. Thing is, he rents out a couple rooms so he has roommates who end up covering most of his mortgage so it actually can work out well. It’s hard to predict job changes even 3 years down the road so career-wise there may never be that ‘perfect’ moment to buy a home. A little bit of rambling in this comment but hopefully I made my point somewhere in this paragraph haha.

    1. Haha thanks DC! That is crazy that he makes that commute each week.

  5. Gaming Your Finances

    Right now we’re actually in the process of paying off our mortgage. One thing I did notice after going through all the fees is that our mortgage company actually charges a fee for collecting property taxes and remitting it to the government. Not sure if its like that everywhere but it could be a good way to save a bit of money. We always paid it ourselves. Just four quarterly payments each year.

    1. Good job! When do you think your mortgage will be paid off?

  6. I think when you are young, it is really important to weigh all of your options before buying a house. You’ve mentioned a good number of the ones I was thinking of. For many, they might find out after a few years of working that their job isn’t their passion and want to do something else. If this happens and you have a house, you have a big asset you need to get rid of if you need to move or relocate for another job.

    For some young people, buying a house at a young age makes complete sense. For others, not so much. The key is doing your homework and being honest with yourself so that you don’t end up regretting it.

    1. I agree Jon, buying a house when you’re young is not for everyone. If we didn’t live in a low cost of living city, I’m not sure if we would have bought – there’s no way I would have forked over $500,000 or more for the same house in a different city!

  7. Oh, yes, you had two very valid reasons for moving, Michelle. Scary stuff!!! The only thing we would’ve done differently with our house purchases is to put 20% down instead of 5%. We won’t make that mistake again!

    1. Same here! We made that same mistake.

  8. That is crazy you found a snake in your bed! One of the first places we lived after getting married had apparently been a drug house/ brothel and we found this all out AFTER we signed to rent the place. Suffice it to say we got out as quick as we could as we’d get some very sketchy people coming by not realizing we were not the previous renters. That said, I’m actually helping my younger brother through this decision right now. There’s certainly a lot to consider, especially from the long term aspect.

    1. Wow that is insane! Did you have to pay money to get out of the contract John?

  9. We bought our home when we were 23. While it was a pretty easy process, especially back in 2006, I would recommend people get pre-approved before they go shopping for homes. Know your number and understand how much money is really going to be needed. It can be quite expensive!

    1. Getting pre-approved is something I forgot to include. Thanks for the reminder!

      Getting pre-approved is so important. It would stink to look at a house and fall in love, only to find out that it was just slightly out of your price range.

  10. Wow, I’m 27 and I use the excuse that I’m “young” for not being a home owner. Fact is, I don’t know how much sense it makes for me to buy in NYC. I don’t know how long I’m going to be here and let’s face it, it’s CRAZY expensive.

    1. Yes, if we lived in NYC, I think it would be completely different for us. We probably would not have bought so young.

  11. I think that maintenance and utility bills are two areas that people do not budget enough for when buying a home. This past winter was an eye opener on a lot of people about how high utility bills can get for homes. Also, home maintenance is one of those areas where you don’t know exactly what will need to be fixed (appliances, tiles, floors, toilets, etc.) but you are guaranteed to have to fix multiple things the longer you live somewhere and the more wear and tear your home takes and those projects can get expensive.

    1. Yes! So many people do not think about maintenance and utility bills. Homeowners should always factor this in, as some houses have extremely high utility bills and repair work that needs to be done.

      I know someone who uses propane for their home. I guess propane over the winter substantially increased and it cost them $1,000 more than usual just for ONE MONTH!

  12. We are currently saving for our next home. We of course want something much nicer, but that costs money! ๐Ÿ™‚

  13. I won’t lie, I was definitely not as mature when I was 20 as I am now. Sometimes I look back and cringe – luckily everything worked out well! ๐Ÿ™‚

  14. This is great advice! I can’t imagine buying so young, but I also knew that I wanted to move when I graduated college. Where I grew up was not affordable at all. Since we’re not really sure where life is going to take us, we’re renting for now. We don’t really have a desire to own, either. I freak out when I find spiders around, I would have died if I found a snake in my bed!!

    1. Yes, the snake thing gives me nightmares!

  15. Great post! I would advise young people looking for a home to seriously consider purchasing a duplex as opposed to a single family home. There is some work and inconvenience (I would argue minimal), but the financial rewards can be significant. You can then potentially keep the duplex and move into a single family home down the road while keeping the cash flow of the duplex.

    I ended up buying a duplex at age 24, so I wasn’t quite as on the ball as you, but it still puts me as one of the first among my friends in my age range to buy a home. For me, a duplex was a great option as I am able to live in one half, rent out the other, and have the renters pay almost my entire mortgage payment.

    Best Regards,
    Ryan

    1. Buying a duplex is a great idea. I wish we would have done that!

      1. It’s not too late! ๐Ÿ™‚

  16. Buying a house at 20 years old does seem young, but you did have a lot of things working in your favour including the cost of housing and the fact that you were both already working. Home ownership is a big responsibility too, that not every 20 year old can manage (or 30 year old for that matter!). Unfortunately too many people watch too many episodes of “House Hunters” or other HGTV shows and think that they know everything they need to know about real estate – or that home ownership is an absolute must vs. renting. There are a lot of risks with buying a house, especially if you are just starting your career as well, so people really need to consider every aspect before taking the plunge.

    1. I agree! There are so many things to think about. I do think that we rushed into it, but luckily everything worked out well.

  17. Kate

    I bought my house by myself when I was 23. It’s 3.5 years later, and I’m still happy with my decision!

    My advice would be to make sure you know what you want and to run the numbers for finances yourself. I had a few instances where I don’t think people took me seriously enough or thought that I’d automatically take their advice just because I was young. It’s important to know what you’re comfortable with financially and not to feel pressured into anything since it’s a huge decision. Just because the people you’re working with (realtors, bankers) are professionals who have done this many times, doesn’t mean that they know what’s best for YOUR life so it’s important to think those things through for yourself.

    1. Great advice Kate. I agree, you can’t take the advice of others all the time, and you need to do research and calculate things for yourself.

  18. I love being a young homeowner! I have always wanted to invest in a home, not shop, not in cars, but in a home. I bought under what I made and made sure to have 20% to put down. PMI would suck. I also couldn’t get any local companies low enough for my interest rate and saw them cheaper online. I would have never gone with the online people cause they were sketch, but I threatened to and got my low interest rate with a reputable local title company. Score!! Never under estimate the power of bargaining!

    1. Good job on bargaining Lauren!

  19. I was a hot mess at age 20, and there is no way I could’ve paid for a house! Great job, Michelle. You were obviously far more responsible than me.

    1. Thanks Holly! ๐Ÿ™‚

  20. Wow. That’s great for you Michelle. I always wanted to own a home before I reach 21, I just hope I can get more sources of income for myself, so I can do that.

    1. Thanks! ๐Ÿ™‚

  21. Candice

    I just had this dilemma. We’re 22 and 24 but we’re going to wait one more year. We’re eligible for a VA loan which is nice because after saving for another year our interest rate will be nonexistent.

    1. That’s awesome! What kind of home are you looking for?

  22. I’m so sorry! That really stinks. I’m glad that everything worked out for me when it came to the housing market, but I realize that others weren’t as fortunate!

  23. Jessica

    My husband and I are currently thinking about purchasing vs renting being that we are now a family of 4,5 if you count the cat. We live in a small apt (700sq ft) in NYC (Queens to be exact) but I just can’t fathom how we plan on saving for the down payment being that combined we net just above 90k. We considered a 2 family to help with the mortgage and utilities. It sucks to feel like it’s a dream we will never achieve because we don’t want to leave our family in the city.

    1. Luckily we do live in a low cost of living city. I don’t know how those of you in expensive cities like NYC do it. I hope you find something that works for you and your family Jessica ๐Ÿ™‚

  24. I am so impressed that you bought so long and are still happy with your decision. Here in New Zealand, property is SO expensive. It’s cheaper to rent, but you’re still looking at $400 a week to /rent/ a small, nothing special house.

    I need to move somewhere cheaper!

    1. Thank you Christine!

      And yes, I have heard about crazy New Zealand prices. I don’t know how all of you there do it! I would go crazy ๐Ÿ™‚

  25. Housing costs where we live are pretty cheap – but the property taxes are nuts! (From what my home-owner friends tell me.) My old co-worker paid more in property tax each month than I did on rent! So, I’m happy to rent for now but hopefully we can manage to get into the real estate game before I turn 35 – but that’s only 4 years away!

    1. Property taxes in my town are cheap, but just the next town over and it is insane as well. It’s crazy how much it can vary in just a 5 mile radius!

  26. Thanks Lauren! And haha don’t feel like you’re not accomplished. Part of the reason I had to find a place to live is because I had no where else to live.

    1. Haha yes rent free life must be nice ๐Ÿ™‚

  27. My best advice is have savings and be conservative with your home buying budget. We only spend about 75% of what my husband was approved for and we still struggle some months. Then there are the fun things that pop up like $1600 worth of septic system repairs and that random roof leak we found last week that we’re hoping to hold off on fixing until fall/winter when it’s rainy again.

    For us, we moved two hours away from “home” in order to be able to buy a home because we wanted out of parents houses and knew no one would rent to us with our plethora of animals. Plus, we just wanted to get a head start on life, I guess you could say.

    1. Yeah, home repairs are never fun! That stinks about the septic system and the roof leak ๐Ÿ™

  28. In retrospect, I should have bought a house when I was in my early 20’s -actually, right after our big earthquake would have been a perfect time when housing prices tanked. However, I wasn’t anywhere near thinking about buying a home. Guess I have to wait for the next big one! ๐Ÿ™‚

    1. Next time ๐Ÿ™‚

  29. Lisa E. @ Lisa vs. the Loans

    I was 23 when I bought my house, and I had a lot of help with the down payment from my mom and auntie. It definitely isn’t for everyone, but I had to do it for the benefit of my family. Long story that I won’t get into. I’m glad I’m a homeowner, though! Even though I’m not sure where these next few years will take me, I always have the option of renting it out or selling it if necessary. Plus, it’s a huge bump in my net worth!

    1. I hope one day I get to hear your story – I hope everything was all right!

  30. Sam Li

    I like what you said about hiring a real estate agent that is an expert when it comes to negotiating. Buying or selling a home is no simple process, so it’s best to work with a real estate agent that is familiar with the market’s trends. My sister is looking to sell her home, so I’ll be sure to help her find a real estate agent that can satisfy her needs.

  31. for some people, buying a house at a young age is good because it teaches them financial responsibility, in addition to making an early investment that may pay off big time in the long run, not only by their house being paid off, but knowing be made a mature and wise investments in their youth that panned out fairly well for them later on. ๐Ÿ™‚