By now you've probably grown tired of hearing about dot-com millionaires barely into their 20s who own homes and much more -- while many of us have memories of the early 20s which include as many roommates as you could stuff into a tiny apartment and subsisting on a steady diet of macaroni and cheese.

But you don't have to be a young and successful Internet entrepreneur to consider the possibility of homeownership. The basic guidelines for investing wisely are well known and it's not uncommon to acquire a first property before age 30.

The fact is that it's never too early to start building equity. Yes, owning rather than renting implies new and different responsibilities, but so what: The reality is that 42 percent of all home buyers are first-timers according to the National Association of Realtors. No doubt, among these many first-times are those who have yet to reach age 30.

No less important, the earlier you buy the earlier you are likely to pay off your mortgage and build up debt. No, real estate is not a sure thing, but most owners in most markets have done well over time.

So, should you buy a home at an early age? There are a number of factors to consider.

• What is your job situation. Are you in a stable position that you genuinely enjoy? Are you keeping your eyes and ears open at work to signs of instability? What are your prospects for the next few years? Be wary here, even big companies can change course.

• Have you gotten a raise? Many financial planners will advise you not to jump into the house-hunt immediately following a raise. Instead, live modestly and use the raise as a starting point to save money steadily. (If you received a one-time fat bonus versus a steady raise, however, there's no reason why you shouldn't go ahead and start looking.)

• Get proper assistance. Homebuying has become more complex in recent years because of additional disclosure forms, inspections, and paperwork, so you want to work with a broker who can best represent your interests.

• How much house can you buy? Being young means you are (hopefully) not at your peak income-earning level and you have not had much time to save. So, if a dream house is out of the question right now, what is affordable? Do you purchase that newer, larger and more aesthetically-pleasing home that requires a longer commute, or do you opt for something which is perhaps smaller but closer to a metro core?

• Do you go for an existing home or a new house? Both options have advantages, but because all homes are unique it's not possible to say one choice is always better than the other. That isn't the case, you need to examine each home you see with care.

• In addition to a broker, line up other assistance. Ask your broker about lenders and loan programs, and also make certain you have a qualified home inspector who you trust.

• What is the tax impact of ownership? Generally you should be able to switch from a standard deduction on your federal taxes to itemized deductions and bigger write-offs. The result should be a smaller tax bill and more dollars to spend as you like. For details speak with a CPA or enrolled agent.

Ownership isn't for everyone, but the reality is that most people ultimately buy property because of lifestyle, financial, and tax reasons. When those reasons are right to you, it will be time to buy -- even if that 30th birthday is a few years ahead.

For more articles by Courtney Ronan, please press here.

Published: March 5, 2001

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