Real estate investments aren’t just for the rich and famous – they can even be for broke college students, believe it or not.
Whether you buy the property yourself or you work with someone who has the funds but needs your services, there are several ways to invest in real estate when you’re still in college.
House Hacking – Become A Landlord
This is one of the most profitable, yet least known tactics to invest in real estate when you’re still in college.
It seems sneaky, but it’s completely legal, no matter the type of financing you secure.
Once you live off-campus, you may buy a property. If it’s a 1-4 unit, you have multiple units. You obviously don’t need to live in all of them. Here’s where the ‘hacking’ comes in.
You live in one unit and rent out the rest of the units. You’re an instant landlord and real estate investor. You don’t even need a large down payment, so it’s not as hard as it seems. Your renters pay you to live there, and you pay the mortgage for the entire property.
If you price the rent right (and within the market’s values), you’ll receive enough rent to cover your mortgage payment and then some. You’ll walk away with a profit and not have to worry about mortgage payments, although the other responsibilities fall on your shoulders, like maintenance, repairs, and taxes. You can use a free Deal Analyzer to make sure your investment will be profitable.
Make sure you budget accordingly so you can cover all of the building’s expenses. If you do, you put yourself in a good position to earn profits, especially if you keep the property long after college.
Wholesaling – A Matchmaker For Buyers And Sellers
If you aren’t ready to own the real estate outright, consider wholesaling, aka playing matchmaker between buyers and sellers. You work as the ‘middleman.’
Here’s how it works.
You look for the deals – the real estate for sale for a great price. Put your super-sleuth skills to work and find the deals that buyers don’t have time to find. What you’re looking for is motivated sellers, aka sellers about to lose their home and who are desperate to sell. The homes may or may not be on the market yet.
You go in with an offer – telling the sellers that you’ll find a buyer that will pay what they need (it’s usually below market value).
Next, you find a buyer. This is the investor – the person that wants to buy homes buy may not have time to look for them. You tell the investor of the deal if he bites when you combine the two – you have the perfect recipe for a small profit. It works because you never had to invest any of your own funds.
Create A Real Estate Partnership
If you’ve worked hard, have the education, and experience to run an investment property, but lack the funds, create a real estate partnership.
Just like wholesaling, you don’t need funds to start (maybe some, but not a ton). You partner with a real estate investor that has the money but may not have the time or desire to manage a property. He/she will pay you to manage the property, while he earns some of the profits of owning the investment.
You work as the property manager while the investor is the ‘money.’ This is less risky on your part since you don’t put any money on the line, but that also means lower profits so make sure you’re aware of your worth so you price your services accordingly.
Invest In Real Estate When You’re Still In College
College isn’t just about hitting the books and possibly the parties – it can be one of the best times in your life to start your real estate investments. Think about it, if you start young, the sky is the limit. You can only build up from here!
Whether you invest to help fund your college education, to put away for retirement, or just because you know you have what it takes to do it, the possibilities are endless.