Why We Bought Our First Home in Our 20s

My significant other and I bought our first home together a few months before our wedding. I was 22 and he was 25 — by many standards, young for both marriage and home ownership.

We chose to buy a home when all our friends were renting and far from settled down because we saw an investment opportunity. 

Here’s why we believed we were making a smart financial decision by purchasing our home.

We Planned Ahead

We’re both frugal by nature and prodigious savers. We both preferred keeping cash in our own pockets, and sought out experiences to enjoy rather than material stuff to buy.

By the time we made it through college, started our professional careers, and were about to get married, we had enough cash savings to use for a down payment without draining our accounts.

We also spent a lot of time figuring out what our price range would be before starting to check out homes in the area we wanted to live.

We put the finances first. If a property wasn’t within our set budget – and with good potential for resale – it would not be considered. Period.

The Timing Was Right

The reason we felt confident that purchasing a home would be a smart investment was largely thanks to some really good timing.

When we bought, the market in our area was still depressed from the busted housing bubble. 

Home values hadn’t recovered — which meant there was a lot of inventory available and most of it was steeply discounted. We were in a buyer’s market, and wanted to take advantage.

We Found a Good Deal in a Desirable Location

When we started house hunting, the number-one consideration wasn’t how many bedrooms, how big the yard was, or if the kitchen and bathrooms were updated. We weren’t the traditional buyers, and we must have frustrated the heck out of our real estate agent!

Although we didn’t have dreams of settling down in the suburbs, we bought a home in a highly desirable area surrounded by parks, good school systems, and a Mayberry-like downtown square. Our house would be perfect for the average family of four – and that’s exactly why we chose to snatch it up when it was put on the market by motivated sellers.

Again, the reason we chose to buy a home wasn’t to achieve our personal American Dream, but to grow our wealth by making a good investment. That meant we weren’t necessarily looking for our idea of the perfect place. More important was how easy it would be to rent out or resell the home in a few years.

The Finances Worked in Our Favor

Ultimately, our reasons for buying a home were based on the market and our own position within it. We had cash savings at a time where sellers were desperate to shed the liability of their real estate. This meant a low purchase price for us – and the sellers paid the closing costs.

Additionally, we scored an extremely low interest rate on our mortgage. This helped ensure that home loan truly was good debt, as we could use it to leverage our cash. Thanks to a monthly payment on our mortgage, we have cash each month to invest in other areas that will likely provide returns far greater than the cost of the loan.

At a time where many media outlets reported (and still report) that Millennials were shying away from home ownership, we took advantage of a few key factors and bought our first home as an investment. So far, it’s proven to be a good investment – and we’re currently making plans to find a new living arrangement for ourselves so we can add to our income steams by renting out that first home.

Determining if Buying a Home Is Right for You

If you’re debating whether or not to purchase a home, ensure you have enough cash savings available for a 20% down payment. You’ll also need a healthy emergency fund. In other words, don’t drain all your savings to get into a home!

Houses are expensive to maintain and when things go wrong, repairs are costly. You should have a stable income to cover regular maintenance, and try to keep your housing expenses to 25% or less of that income. You don’t want to overextend yourself.

You should plan on keeping a home for at least five years. Trying to sell any sooner probably won’t prove profitable – and if you buy your home and sell it in less than two years, you’ll need to pay capital gains taxes on any profit.

Choosing to buy a home is an intensely personal decision. Don’t feel pressured into buying if you’re perfectly happy with renting. If you’re not sure whether it would be financially best to rent or save up to buy, use this comprehensive calculator and crunch your own numbers.