House hunting for youngsters our age usually refers to ‘looking for a flat to rent’ rather than a place to buy. Subsequently, our 20 something year old peers who’ve left the nest are either renting their own place or sharing that rent with roomies in a digs. And although there are tons of benefits to renting a place while in your twenties – including less debt, no maintenance costs and having the freedom to house-hop as you please – the flipside is – you have no real asset, no real investment opportunity and no real (estate) as security. Also, purchasing a house in your mid 30’s means only paying it off when you’re well in your 50’s. By then, the friends who started playing the property game in their 20’s would have built a strong portfolio of properties or at least own an income generating property or two by then.
Understandably though, for many of us, the first ‘serious’ property conversation we had took place during our university years, the second or third would be when considering to settle down with our partners. After university our journeys usually lead us onto the common path of searching for the ‘Rental’ options rather than the ‘For Sale’ signs. With reason though, as our first post-graduation jobs pay us just enough to cover our food, clothing, transport and rental expenses, in that order in fact. Additionally, amongst us are 20 something year-olds, carrying an extra load in form of ‘black tax’. So how can we even think of buying a house?
Consequently, upon pondering on all our disheartening deductions, we positively switch our minds towards our entertainment costs. Our happy place - where we actually get to ‘enjoy’ our money, which we worked so hard for, by the way. However, by the time we start getting ‘on top’ of our finances, something new comes up – another expense that pushes back our ‘buying a house’ plan. So perhaps we should revisit that property conversation, take a look at the “FOR SALE” signs this time and find out what the benefits of buying a house while you’re still in your twenties are.
I would be a hypocrite if I didn’t purchase my first property in my twenties and yet advise you to do so. I purchased a home at the age of 23, not only to relieve me from throwing away thousands of Rands to rent but also to start building up my property portfolio. So having been in the game for two-years now, and currently looking for the next property to buy (for investment purposes this time), I would happily advice anyone to start early.
I got tired of just having the property conversation and decided that before having all kinds of cards, kids and expenses, I would get the ‘first’ property purchase thing out of the way. My first year of working as a graduate trainee included buying my first car, shopping, saving and researching my butt off about property investment. The following year I managed to pay a lump sum into my car, which substantially reduced my loan term. I was preparing my pocket for the adjustment that my homeloan expense would require and I was intentionally pruning and grooming my credit record. I ended that year off with a letter congratulating me of my new home. And yes, even though I feel the pinch every month when my debit order goes off, I have an inexplicable relief that it’s not going to a landlord but to my asset.
So here are a few helpful tips when considering buying your first property:
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