When I started my blog I never imagined I would be blogging about this but here goes, let’s talk about buying a house! I’m sure there are many people out there in a similar situation who are torn between buying and renting and so I felt like this was a pretty apt blog to write. Here’s my two cents on buying a house in your twenties.
Irish traditions don’t usually lean towards renting as our culture is much more old fashioned wherein many young people will save for the deposit before they even live together. *crazy talk. When you think about it, a mortgage is probably the biggest debt you’ll take on in your life. You’re legally binding yourself and your partner to a bank agreement for the most part of your adult life. There are a lot of things to consider before buying a house, especially in your 20’s.
I was born in 1990 and am part of the generation known as the Celtic Tiger cubs. Having previously written about this before (I won’t bore you) my childhood was during Ireland’s biggest economic boom. With money to spare and no dream too big, I was raised surrounded in a culture that the sky was the limit. Just as I was on the brink of graduating secondary school the economy collapsed. 2008 saw the biggest crash in Irish history. As a young adult about to embark on the next biggest chapter of my life maybe following my dream to work in the fashion industry didn’t seem so logical. As I said, I’m fortunate enough to have witnessed my older siblings follow their dreams and knowing that it isn’t always easy but worth it in the end, I carried on. Not everybody has a brother who chose professional football or animation and succeeded. So, I done 4 years in college broadening my skill base and really through trial and error landed on my feet. I didn’t do a 4 year business degree and I definitely didn’t chose a traditional route. I was probably one of few, but I knew it would turn out in the end if I just kept the faith.
In hindsight (and I may be selfish saying this) the recession was the best thing to happen to my generation. Suddenly I realised that you don’t just get what you want, you have to go out and work for it. Four years of college that I felt had served me well here, meant nothing when I was part of the unemployment statistics. I had to chase those dreams and leave behind the Celtic Tiger Cub. I was now just another person titled ‘Generation Immigration’.
So we moved away for two years and we had to work hard to gain experience in our desired fields. Those two years were some of the best of our lives and we have the recession to thank for that. If our economy had never declined who knows what path we would have taken. Along with experiencing working abroad, meeting great people and travelling we enjoyed renting our small one bed downtown Toronto condo. I never thought a rented property could feel like home, but turns out it can!
Having moved home a year ago, it seems a bit crazy to be part of the economy’s resurrection. Over the past year its clear to see that there is money again in our little country. When we first moved back we were stuck deciding whether or not we should rent or buy. But unfortunately with the recession came an inflation in rental. It didn’t make sense for us to pump money into rental anymore. So like many young couples in Ireland today, we moved back home to save.
How to save a deposit?
One of the most asked questions that may seem pretty straight forward, right? As I mentioned, we moved back home for a year to save up our deposit as we could get it together quicker. It meant sacrifices and times of struggles, but now I can say it was all worth it. If you decide you want to buy a home, it means you need to be serious about committing to a savings plan. It means you can’t dip into it or decide you don’t want to save that particular month. This is where a 20something may not want this type of lockdown. Just like the financial commitment of a mortgage, you have to guarantee you can save the required amount just like you’ll have to do with a mortgage repayment. It means budgeting and forward planning, so no shopping sprees or spur of the moment purchases! You need to think about whether or not you’re wasting your money on stupid stuff. ‘Stuff’ is exactly what it is, it’s consumption of material things that are disposable. Think of the forward plan and what your goals are, if buying a house is the priority then shopping doesn’t come into the equation. It may seem pretty straight forward by its harder to be patient than you’d think.
As of the new Central Bank regulations, it’s a little more disciplined and difficult to over-borrow now. Therefore, it’s all about affordability and saving a deposit for a realistic property value. Knowing what you have to save a month for the property you want to buy will really help.
When is it the right time to buy?
Nobody knows. You just have to go with your gut feeling. Having a mortgage technically means a long term commitment and so this can hinder any future plans to relocate. But you can only predict so far into the future and at some point, you just have to live in the now. There’s nothing to say a property cannot become an investment and an equity in the future. You can always rent out your property and become a landlord.
What are your priorities?
The biggest question you need to ask yourself before you get into any kind of long term commitment. What matters to you most right now? Is it owning a home? married? kids? career? travelling the world? shopping? drinking? partying? There are a lot of questions you need to ask yourself first. The main issue for me is making sure you aren’t going to live a life of regret. I wanted to live abroad, work abroad, meet new people, live independently, travel to the places I’ve seen (plenty more of that!), start my career, grow with my career, meet someone and now I’ve come to the point where I’m ready for the next milestone. After doing all those things and living how I wanted to without any traditions dictating my actions, we want buy a home.
At the end of the day, you can do up a pros/cons list until the cows come home. But if it’s not a priority for you right now, it won’t work because your heart won’t be in it and you’ll resent everything that comes along with it. Three years ago I 100% did not want to buy a home. I was 22 and just starting a very exciting journey. I just knew it wasn’t a priority to me because we were too adventurous at that time. It all depends on you. If you’re keeping up with the Joneses? It’ll never last and you’ll never be content.
So: buying a house in your 20s is more than possible once its the right decision for you.