Since I recently turned 24, I wanted to share one of the biggest moves I’ll be making this year (literally). I’ve been house hunting for a few months. I think it’s important to start thinking long-term early and to focus on what smart investments you can make in your 20’s. Today I’m teaming up with Kylie from The Happy Camp to share a guest post on home buying advice for millennials! We did a Q&A with each other to learn more about our experiences and share some insight. To hear my home buying story, click here.
First, get to know Kylie.
I’m Kylie, the kinda gal who tears apart the house while her husband is at work, hoards estate sale furniture in her basement, and can’t bring herself to throw away a can of gold spray paint. I am a newlywed wife to my husband, JR, a dog-mom to our Brittany spaniel, Camp (to whom our blog is named after!), and a devoted follower of Jesus. We are Lincoln, Nebraska natives but currently reside in Kansas City. Follow along our journey renovating our 1973 Kansas City fixer upper on our blog thehappycampblog.com!
Now for the Q&A.
Describe your life situation when you decided to buy:
I purchased my first home right after college when I was 21. I enrolled in a first time homebuyer program which allowed me to qualify for a grant to use on the purchase of my home. The timeframe of this worked out great because I was fresh out of college with a fairly low income (which allowed me to qualify for the grant) and the program only required you to put $1000 down without PMI (PMI is property mortgage insurance, it is an additional fee you incur when you don’t have a 20% down payment). You can learn more about why you want to avoid it here. I had a couple girlfriends who needed housing as well so I was able to offset the mortgage payment with their help for a few years. I decided to buy a home because I was fairly certain I would be in Lincoln for a while and wanted to start investing in a home rather than paying rent. My husband bought his first house that same year through the same program and was in a similar financial stage and age. It was very exciting and I don’t regret taking the big leap to do it independently.
Where are you currently at in your home buying process? (Background on your home buying and where you are at currently)
We recently closed on our third home in Kansas City this past January and have since sold both our homes in Lincoln but I will focus mostly on the home I bought in Lincoln since that was my first. My home buying story is a little funny. I had just completed my first time homebuyer class on a Tuesday in January and was ready to start looking at homes. On Wednesday I came up with a list of houses with my realtor in a specific south Lincoln area and formed a plan to look at houses that weekend. My parents happened to be in Lincoln on Thursday and drove around the neighborhood we planned on looking at that weekend. They drove past a sign that said “City of Lincoln” with a phone number below it so my dad – being the gutsy guy he is – drives in the driveway and starts poking around. He gathers that the home is brand new (surprising given the fairly old neighborhood) and that it is unoccupied so he calls the number. The City of Lincoln guy, Steve, informs them that it was a condemned lot and the city ended up dozing the house and building a new one. It had been for sale in August but the deal ended up falling through and the home had only been back on the market for a week – for some reason it wasn’t listed on MLS and the sign out front didn’t say “For Sale.” I end up driving into Lincoln and meeting Steve and my realtor, Talli (she is the bomb), and I put an offer in pending my approval and the bank. On Friday I meet with the bank and get my pre approval letter and my offer was accepted on Monday. It was seriously such a rush – it was the only house I looked at and was an exceptional purchase. Take my story with a grain of salt though, it is definitely a unique case – my husband looked from January until May until he found his first home so everyone has a different experience and timeline based on location and market. Mine was heavily based on luck!
What made you want to buy a home?
My biggest reason was wanting to invest my money instead of spending it on rent. It was also sort of that “independent woman hear me roar” thing that I wanted to buy a home on my own before I was married. I also LOVE home renovation (obviously, I have a blog dedicated to it!) but overall that didn’t really pan out since my first home was brand new. It was fun decorating though and taking on homeowner responsibilities forced me to grow up quite a bit.
What held you back from buying a home?
That first home sort of fell in my lap and timing wise I looked into buying as soon as I graduated so nothing really held me back then. Our home buying process in Kansas City was a bit more of a whirlwind and our biggest hurdles were finding the right location, size, and price. Affordability and resale should be top priority. My good friend, Amy, gave us the best advice to not get sucked in and buy something out of our budget – that huge mortgage is never worth it.
What do you think are the biggest benefits of buying vs. renting?
Looking back we sort of regret buying our Kansas City home right away – we have found some other neighborhoods we might have preferred better so if you are in a new city/area, renting may be the way to go so you are able to get your bearings a little. There are also a lot of hidden costs (appraisal, closing costs, insurance, etc.) when buying a home that doesn’t generate any equity. You should plan on being in your home at least 5 years to offset those costs and gain some equity for resale.
What was the scariest part of buying a home?
I think most would agree the top two things are taking on a huge debt and financial responsibility and things breaking. My first home was brand new so we didn’t have a lot of problems. One good example was 1 month after I had moved in my roommate called me telling me the ceiling was leaking water….uhh yikes. It ended up being condensation from the AC and we got it all dried out and fixed but it was definitely one of those “what did I get myself into” moments!
What is the most exciting part of buying a home?
It is one of those big grown up moments that you think of as a kid and then it happens and you are sort of like “wow I just bought a house!” It is also exciting to do all the homeowner things you can’t do in a rental like landscaping and painting. We have enjoyed renovating our KC home so much and it truly gives you that sense of ownership. Also, the investment piece – that $1000 I invested back when I was 21 turned into our 20% down payment on our current home and then some.
What is the most frustrating part of buying a home?
Finding a house and inspections. Right now the market is the worst for buyers. Houses are selling for thousands over asking and you have to make decisions quick or lose out. You also need to be willing to compromise. Our yard at our house in KC is a little smaller then we would have liked and the kitchen needs an overhaul but it was the size, layout and style we liked and on a cul de sac (we were on a busy street prior) so those offset the things that weren’t so great. It also sucks finding a great house to then realize the foundation is practically dust.
What should you avoid when buying a home?
Going over budget! I think I’ve mentioned about a million times on my blog that we are Dave Ramsey obsessed. We stick to his formula which is the monthly payment should be no more than 25% of your monthly take home pay and a 15 year fixed rate mortgage. You will probably qualify for way more than you can afford or even need. Pick a budget and STICK TO IT! Other things to avoid are buying the most expensive house on the block and hot tubs (lol!).
What really matters after buying a home?
This really comes down to lifestyle. My husband’s top priorities were a big driveway for basketball (totally not kidding), not being on a busy street, and he preferred the ranch style. My priorities were a kitchen that needed updating, a good layout, and some charming character. It really helps to be open minded. Things like carpet, paint, wallpaper, and light fixtures can all easily be changed. Layout, neighborhoods, bad foundations, and outdated electrical and plumbing are hard to change or expensive to fix.
What isn’t that big of a deal post-purchase?
Paint and wallpaper. I hate watching HGTV and homebuyers are all “I can’t even with this wall treatment.” That is probably the cheapest and easiest fix and it makes such a difference.
Your advice for millennials currently buying a home:
Don’t over buy and definitely start by forming a plan. I think a lot of millennials think that they are too young or just can’t afford it. I would see how much you are paying in rent and how much you have saved up and meet with the bank. I agree with Meg in being very realistic. This is your first home so think of it as such. It doesn’t need to be your dream home but it can be a great investment.
Your advice for single women currently buying a home:
It is definitely doable and also gives you a great sense of independence and pride. My husband and I were set on not living together before marriage and I see a lot of my friends wait around to buy until they are married or rush into buying with a significant other (which I highly recommend against for personal and liability reasons) instead of doing it solo. If you are in a financial place to buy and aren’t looking to move to a new city then I say go for it! #bossbabesunite
The weirdest/funniest thing that happened during your home shopping experience:
Usually when looking at houses they have a lock box and the owner leaves and you show up and look through it with your realtor. Usually… One time we went to look at house around 7-8 at night and the owner didn’t want to leave. So, we walk in and all the lights are off and he is sitting in his recliner watching TV. He doesn’t say hello or even acknowledge us at all (#awkward). So, we weirdly walk around his house and are like whispering so we don’t disturb him and then leave. Our realtor said that was super uncommon and was totally weirded out too. We did not buy that house! HA!
What’s my experience?
To hear my home buying story, click here. Home buying is a process that shouldn’t be taken lightly and involves lots of steps! If you’re looking for any tips or a great realtor, feel free to drop me or Kylie (she knows all!!!) a message via Instagram, an email at email@example.com, or leave a comment below!