How I bought my first house at age 19

It’s never too early to stop buying and start focusing on longer-term goals

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From the June 2015 issue of the magazine.

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How I bought my first house at age 19

(Photograph by Roberto Caruso; Wardrobe courtesy of Harry Rosen)

Ever since I can remember I loved spending time at my uncle Stewart’s auto repair shop in Thornhill, Ont. As a child, I’d help wash cars, clean up the shop floor and help out with small repairs. Over time, uncle Stewart made a profound difference in the way I think about money and investing. In fact, his auto garage turned out to be the perfect place to hear stories about the importance of building wealth from a young age.

Uncle Stewart had bought his own house 20 years ago and built his wealth slowly by paying down the mortgage quickly. The lesson for me was obvious—buy a house, pay yourself first by paying off the mortgage regularly and one day, you’ll wake up and the house will be worth a lot of money. For years I watched my mom, a single mom, work hard as a homecare worker and save whatever money she could. Then, three years ago, she bought her first house, too. Seeing both my mom and my uncle have such a passion for building wealth through home ownership inspired me and that’s when I decided to buy a home of my own and start building wealth for myself. But how to start?

Since I loved tech courses I talked to my Grade 11 teacher who encouraged me to continue my studies in auto mechanics. As a result I started a co-op term in auto mechanics during my high school years and after graduating high school, I was hired by the head mechanic of a local auto repair shop as an apprentice. Today I work with a fully-licensed mechanic, making $14.65 an hour. Within weeks of starting my full-time job, a friend explained to me how he was saving $500 every two weeks in the hopes of building up a few thousand dollars to invest. I was paying my mom $200 a month in rent to help with expenses, which was minimal, so I made a decision to concentrate on saving up money for a down payment on a house. After 15 months, I had saved $6,500 and I was spending weekends going around to pre-construction sites and checking out house prices.

In November 2013, I took the leap and bought a 1,300 square-foot freehold townhouse for $236,000 in Shelburne, Ont., 100 km northwest of where I live in Ajax, Ont. I was 19 at the time. Upon signing, I put down $3,000 and I’ve been paying $1,000 each month to the builder for over a year now. My plan is to rent the townhouse out for $1,300 a month—almost enough to carry all expenses—when I get possession this fall. At that time, I’ll have enough saved up for closing costs as well as $7,000 extra to put towards the mortgage.

My long-term plan is to live with my mom in Ajax for a few more years as I steadily pay down the mortgage on my Shelburne house. I’ll contribute $350 every two weeks towards the mortgage principal and put a further $300 a month towards a fund for repairs. My goal is to have the house paid off in 10 years—and I think I can do it. When I’m a fully licensed mechanical technician three years from now, I’ll earn $60,000 to $90,000 annually and will put any disposable income towards paying down the mortgage. Eventually, I’d like to buy a duplex in a university town and maybe even open up my own auto mechanic shop.

Even with a full-time job and more responsibility real estate investing will always be part of my life. Why? Because real estate is a useful commodity that I understand. I’ve read enough personal finance stories to know that the earlier you start saving towards your financial goal, the more time you have to reach it and become a success. I intend to do just that.

My advice to kids my age is this: it’s never too early to simply stop buying more trendy stuff and start focusing on longer-term goals. Buying real estate has made me feel like I’m moving forward with my life and building my nest egg. That works for me, and if you have the passion I do, it will work for you too.

As told to Julie Cazzin

 

7 comments on “How I bought my first house at age 19

  1. The problem with looking at one’s primary residence, real estate, as an investment is, there are so many expenses, costs, taxes, fees, insurance etc. that will eat up alot of money over years, decades. This is not even including the mortgage, interest costs too.

    I am too a great saver, investor but we kept our primary residence to what we need and not like most Canadians trading up to a more expensive home, condo etc.

    This is a financial trap that will cost people’s retirement and finances. We paid off our house by 29, 30 years old and had $350,000 by then. Now, we have $95,000 in TFSA’s, $850,000 in RRSP’s, $1,450,000 in non-registered investments, had $86,000 in RESP’s being used up but now is $13,000 left, $135,000 in GIC’s, $36,000 in higher interest savings accounts, cashable GIC’s in 30, 60, 90 days.

    We have no debts, no mortgage and have 2 adult children graduating next year, 2015 and 2016. We are both 46, 47 years old. We have been saving since we were 20, 21 years old.

    We have lived by 4 simple money concepts, 1. save your brains out, 2. compound interest to the max in RRSP’s, TFSA’s, RESP’s, any other tax advantaged plans, 3. liquid cash and investments to be able to pay least 3-5 years of living expenses, income taxes and save $10,000 annually, 4. Never have no more between 15% to 20% in physical real estate of our net worth.

    Reply

  2. We bought a house back in 1970 for $35,000 and now it is worth $600,000. It is a spectacular investment but we are now 69 and 72 and have only $186,000 in savings accounts, GIC’s and RRSP’s, RRIF’s.

    We do get $3,800 a month with C.P.P, OAS and my modest work pension but as we get older, we are concerned that we may not be able to keep the house as electricity, heating, water bills plus H.S.T. keep going up by double every 10 years or so not to mention higher property taxes, insurance plus maintenance, repairs costs when needed.

    I wish we had maximized our RRSP’s more and using the tax refunds to save more money too.

    Reply

  3. Why is a 47 year old man salting up a 19 year olds success story? Boast elsewhere.

    Reply

    • It does not look like boasting to me. He is telling his or their personal financial life experience . The points about being proactive and prudent about not having too much house, real estate and all the extra money that will be lost over decades is good points.

      We did something similar in 2003 when we bought our first house and we decided to buy a house that was $85,000 lower in price, mortgage and fit our needs and wants just as good.

      It was about $400 a month less in total mortgage payments plus property taxes, utilities, insurance etc. was another $225+ 5.00% average annual inflation worked out to about $470,000 over 25 years.

      This is with a 4.00% annual return or interest rate, compounded in RRSP’s with annual RRSP income tax refunds reinvested too.

      I agree that Canadians have lost their way on saving and investing for income, reinvesting in other investments instead of just buy a house, condo, hopefully it grows in value alot in 20, 25, 30 years and depend mostly on that by either selling it or reverse mortgaging it.

      Don’t people see the financial wall that most of them have put themselves into now. People will find out later when it gets more hard.

      Reply

      • I think there is a limit that banks, financial institutions use to make sure that a mortgagee can actually afford what house, condo they are buying and financing.

        I believe, it is no more than 35% of gross income that a household should spend on housing which includes utilities and property taxes.

        However, as many Canadians are in debt much more than in the past, it seems that bankers and other lenders are giving out credit more easily than they should.

        Reply

  4. RIP Blake

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  5. Having just read such a positive outlook full of projects for the future… Why would he suddenly decide to end his life? This is so tragic and his family unable to come to understanding what was troubling Blake to do this? Was he so over his head with all that he had accomplished? Too much pressure unable to talk to anyone? So tragic what a terrible waste. I so hope he is now at peace. May GOD bless his soul a distant family member.

    Reply

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