Ok, so we all know that millennials can never buy a house right? The news says so. The news tells us that millennials are avocado eating layabouts with so much student debt that they don’t know which way is up any more. How could they ever afford a house?
This is all baloney of course, but I have been there.
When I first moved out and rented a place, I got caught in the trap of thinking that I could never have a home of my own. I assumed that prices would always just be unaffordable and I almost gave up hope. It is easy to get despondent when you are struggling just to make the rent and monthly bills, let alone save for a down payment on a house.
The good news is that with some simple mid set shifts and some good-old-fashioned hustle, I believe anyone can buy their own home (if they want to that is).
Although property prices might be a lot higher than they were 10 or 20 years ago, this does not mean they are unaffordable!
They might be less affordable, but unaffordable – NO!
I bought my first house when I was 21. At the time, I was earning around $20,000 per year. Not bad, but certainly not a millionaire salary!
There are so many things you can do to help you buy a house and there are tons of examples of people who are buying houses even younger than I did.
With that said, if you are thinking about buying a house, the first thing to consider is … should you?
Although a lot of people say that living with your parents is terrible or that renting a place is ‘dead money’, I don’t really buy either of those things.
Living with your parents can be the right thing to do, especially if you are just out of education and you are figuring out what to do with your life.
Having low or no rent while living with parents can also be a great way to save up some money and start your journey to Financial Independence early.
If you can manage to save up an emergency fund of 3-6 months income before you leave home, then good on you! This emergency fund will likely serve you very well indeed in the future and could save you from going into debt too.
If you are renting, you no doubt have a lot of people saying that everything you pay in rent is ‘dead money’ and that you are ‘paying the landlords mortgage’.
Both of these things are sort of true, but what you are buying is flexibility.
If you are renting a place, it means that you are not tied down or committed for so long. If you get a new job on the other side of town - no problem. With a rented property you can soon move to be closer to your new place of work.
If you fancy going travelling for 6 months – you go for it!
A rented place allows you to ‘come and go’ so to speak without having a load of housing cost for a place that you are not actually living in.
The other real benefit of renting is clear to see when it comes to relationships. If you are looking to move out with a partner for the first time – I highly recommend renting for at least a couple of years before thinking about buying a place.
I see a lot of people who meet who they think is ‘the one’. They rush out to buy a house together and then when they break up 6 months later, they struggle to sell the house.
Even when they do, they have to incur loads of legal and estate agent fees and end up worse off than they were to start with – not ideal when you are also struggling with a breakup.
If you are looking for freedom and flexibility, renting could well be the right thing for you. Renting a place allows you to move around until you have found the perfect location to put down roots. It allows you to travel and have fun and it means that you are not locking into long-term commitments before you are ready.
In fact, a lot of people in the FIRE community (Financial Independence, Retire Early) actually think that buying a house is a really bad idea.
I don’t fully agree, but for some people, some of the time, buying a house will not be the right thing to do.
There are a lot of signs to tell you that you are ready to buy a house.
For starters, if you feel like you want to buy a house (not just that the world is telling you that you should buy a house), then you are probably ready.
You should also think about how settled you are in your job, whether you really like the location you are living in (or thinking about living in) and how committed you are to your relationship (if you have one).
If you have decided that buying is right for you, then there are some things you can do to make the process much easier and faster.
Here are 5 things that you can do to help you buy a home super fast:
Ironically, one of the best things you can do to buy a place of your own as soon as possible, is live with your parents.
As we mentioned above, living with your parents allows you to live with a very low (or even zero – thanks parents) rent and this means that you can divert more of your income into savings.
Even if you don’t intend to buy right away, the money you save in a year or two living with your parents could set you up for a lifetime.
Just because you have saved money while you are living at home, doesn’t mean you need to spend it right away either.
If you want to have the best of both worlds, you could live at home for a couple of years, while saving a nice fat deposit for a house.
Then you could go and rent for a couple of years, enjoying all the freedom and flexibility that goes with it.
When you are ready, you can buy a house, safe in the knowledge that you have that nice deposit already sitting in the bank.
If you are struggling to save for a house deposit, a side hustle could be the answer. A side hustle allows you to earn a little extra money each month and this could all go towards that property deposit.
There are so many great side hustle options out there now and you can earn some extra money whether you have 15 minutes or 15 hours to spare. Some side hustles can actually be really lucrative and even an extra $25 a week or so could make a huge difference to your savings pot.
You can find a list of side hustles that you can start today here.
The great thing about a side hustle is that you are in control. You can decide what you do, where you do it and for how long. There are some side hustles that can take as little as 15 minutes a day and you could earn an extra $10 or so – every day!
Imagine how much difference that could make to that down payment!
When people move out for the first time, it is easy to get swept up in the excitement of it all and I often see people who over-stretch themselves.
I was slightly guilty of this. When we were looking for our first home, we decided that the houses within our budget just weren’t quite right and so we started talking about upping our budget.
Fortunately, we saw sense and bought a property that was affordable in the end, but this is an easy trap to fall into when you are property shopping.
When you begin searching for a property, I suggest you set your budget in advance and stick to it.
Don’t even look at properties that are over your budget – it can be so easy to get tempted. Although more expensive properties are bound to be nicer, bigger, better and shinier – you could regret it later!
Of course we all want to move into the fully finished, turn-key property with the shiny new kitchen and bathroom. The truth however, is that properties that need a little bit of TLC are often substantially cheaper than those that have been freshly renovated.
If you can put up with living with 70s décor for a few years, then you could save yourself a ton of money when buying your first place.
What’s more, with a little work, you can convert the tired and dreary property into a modern masterpiece.
Now my wife will delight in telling you that DIY is not my strong point, but even I am capable of giving a room a fresh lick of paint!
Finally, when you do work to a property, you are adding value. That’s more money in your pocket when you come to sell the house or you buy a new one. That sounds like a win-win to me!
I know I talk about budgeting a lot, but it really is the cornerstone of all good money management strategies. If you want to buy a home at an early age, you need to start budgeting even earlier!
Setting a budget (and sticking to it) means that you will know in advance how much you can save each month and therefore how long it will take you to save up the deposit you need for your property.
Let’s say you need to save $10,000 for your property deposit and your budget says you can save $250 per month – well then it is going to take you just under 3 ½ years to reach your goal.
If you could stretch your budget so that you can save another $100 per month (or work a side hustle so that you can earn an extra $100 a month), then you will reach your target in just over 2 years.
I would recommend that you set up a standing payment to transfer money into your savings as soon as you get paid.
Even if you can only afford to save a tiny amount, the important thing is to get started.
Although saving $10 or $20 per month might not sound like much in the first instance, it is the savings habit we are looking to build rather than the amount.
But even small amounts soon add up and this is the key (excuse the pun) not just to buying your own home, but to Financial Freedom in general.
Good habits, applied consistently over the long term will help you to achieve your goals. It is as simple as that.
P.S – I have created a master budget planner which you can use to get started with your budget. You can download it for free here.