Guest post: Buying Real Estate While in College: A Very Possible Dream

Melissa Tamura approached me to write an article about a collegiate perspective on real estate. The best thing Melissa has done in this article is to tangibly describe how college students think about real estate, and she has outlined a mission statement that can be applied to any college student. I wish Melissa all the best. In the future, with the experience of purchasing a home under her belt, she could use her blog Zen College Life to guide other college students to do the same. In fact, we have a national network of Breaking News sites run mostly by Realtors that can support her message.

What do many college students desire? Freedom, independence, and perhaps, some cash in the bank. One of the best ways college students can achieve these ideals is by purchasing real estate. Yes, what once was impossible is now a very possible reality for many college students. Real estate can allow college students to be savvy investors and gain incredible amounts of money by renting rooms out to other students. This article will explain how you too can buy real estate while in college.

As a future law student, personally, researching real estate in Florida has become my own hobby. My goal is to purchase a property, rent it out to other students, and thus grow a healthy profit on the property while I am in law school. Investment properties can help students pay off hefty student loans later in life.For students without a regular income, purchasing a home may seem impossible. However, it does not have to be. The key is to get your parents involved. Parents can take out a mortgage on a home, and then you pay your parents back on the mortgage payments. Of course this plan holds some risk, however, risk is what life is all about. Your parents will be the ones able to most likely qualify for a mortgage, and then you can simply hand cash over to your parents every month when the payment is due.Perhaps you are unfamiliar with the mortgage system and this seems confusing. Don't worry, this was once very confusing to me as well! The bottom line is, a mortgage is a type of loan you take out on a home.

Mortgages can come in two kinds of terms: 15 or 30 year mortgages. This simply means you pay back the loan over 15 or 30 years. People often stress out about mortgages when they take out loans that are too expensive for them to afford.As a student, however, in your case you are in a great position. As the only individual in your home, you can purchase smaller starter homes. With the current housing crisis, many sellers are putting homes on the market with incredibly low prices. For example, in Florida (where I'm researching real estate as a student), you can find gorgeous 3 bedroom condos and homes in Fort Lauderdale for anywhere between $50,000 to $120,000. For homes only 5 minutes from the beach, this is incredibly cheap!So, let's start with a hypothetical case, to illustrate how this works for college students. Let's say I want to purchase a home that is $100,000 as a student. Typically, a person needs to place 20% of the price as a down payment on the home. Since I am a hard working student, I have been able to save up and accumulate $20,000 over a couple summers of working. This would mean I pay $20,000 in cash or check to the seller which I have. Then, let's say that $20,000 totally wiped out my account. Here is where I would need to take out an $80,000 loan or "mortgage" as it is called.Over 30 years, if I had my mom or dad take out the $80,000 mortgage, I would pay about $250 to $300 in monthly payments on my new 3 bedroom home. Typically for the Fort Lauderdale area, however, renting a 3 bedroom home would cost me anywhere between $1,000 to $2,000 a month. Not only are my payments incredibly cheaper, but I am able to own my own home.If students are really savvy, they will find roommates on campus to live with them. Having only 1 or 2 roommates can mean you make your monthly payments in excess and can pay off your loan sooner! Or, if you have already paid off the home, you can make a healthy $600 to $800 in profit every month!Buying real estate in college is a very possible dream for many students these days. The key is to be open to letting your parents be involved and to have drive and determination to pay off your mortgage.

Melissa Tamura writes about online degrees for Zen College Life. She most recently ranked the best online colleges.  Stumbleupon  Technorati  Digg 


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  • 6/14/2010 12:19 PM Tim Smith wrote:
    Real estate investing is a great thing for college students. If they can find a burnt out owner they might get it nothing down with owner financing. It won't usually have cash flow but they'll get principal paydown and eventually appreciation.
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