For many, the idea of buying a home on their own is frightening. As young people, we often neglect priorities and regard buying a home as something that’s done once we have found a partner and are ready to settle down. As we are well aware, times have changed. People are taking longer to get married (or deciding not to get married at all) and out of the ones who decide to get married, 45.8% of them get divorced -in the U.S. that is- So what or who are we waiting for?

When I was in University, and for sometime after I graduated, I had two jobs, one as a bartender and the other as an executive assistant at a discount brokerage. For a while I spent my money on things that eventually made it to Goodwill (except for my Jackie-O sunglasses) and one day I realized that if I couldn’t invest in my future, why should anyone else? Conveniently I was dating a real estate genius-he will hate that I called him that- and he helped me figure out the key ingredients to buying my first place. I thought I would share some of the tips that Bradley shared with me when I was getting ready to take the plunge.

1. It’s likely that your first place isn’t going to be featured on MTV Cribs, so relax and take your expectations down a notch. The first place I bought was 533 square feet. I know, sounds tiny BUT it’s what I could afford in an area that I liked and now I have my foot in the door. I have an asset! Your first place will likely be smaller than your rental apartment and/or your parents’ house, but it is a step in the right direction. Think short-term pain for long term gain!

2. Be prepared for a lifestyle change. You will have to save more and spend less. If this recession has taught us anything, it has taught us how to be ‘divas on a dime’. So maybe your Steve Maddens will have to last one more season and you’ll have to take road trips instead of bottle poppin’ excursions in LA LA land. But it’s all in an effort to make your life more comfortable in the long term and you will find your life isn’t that bad on a budget.

3. So let’s talk dollars and cents. If you live in a big city like Toronto, Calgary or Vancouver you’re likely going to be looking at buying a small condo. Generally speaking, a bank will allow you to spend no more than 1/3 of your pre-tax income on the total cost of a home. With a condo, the bank adds the mortgage payment, monthly taxes and one half of the monthly condo fees. This total can be no more than 1/3 of your pre-tax or gross income. Banks will also lend you up to 95% of the purchase price.
$250,000 is a common price for a first home and even in Toronto it will buy a reasonable 1 bedroom condo. If you earn $60,000 a year and you can save 5% of $250,000 or $12,500, the bank will allow you to spend $1600.00/month and buy a $250,000 property.