Would it be wise to buy a house, rent it out, and then sell it after I pay off the mortgage?
Currently, I am a college student and looking to buy a house so I would be able to rent it out and then later on sell it for profit. The location of the house I am planning on buying is around the campus of UC Riverside. There are currently brand new houses that will be selling from the low $500,000. I was planning on putting a small amount for the down payment, then getting maybe a 30-year mortgage, and with the money renting it out to students I would be able to use that money to pay off the mortgage.
Because there are big risks with all the money involved and complications that can occur, I need all the advice and help I am able to get.
Quick Property Sale
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June 11th, 2010 at 6:25 pm
Real Estate is a excellent investment, and a home purchase is great. My hesitation is to renting it out to college students, who could destroy the property, hence loosing on your investment, or NOT paying the rent at all. Be very selective in choosing who you would rent to, have them fill out applications and check references, and require two months security deposit. Best Wishes and Welcome to The World of Real Estate!
June 15th, 2010 at 2:24 am
first how much of a handy man are you and how much free time do you have == you can get a management company to handle all the repairs and find renters etc but that will come out of your pocket. also it would not be a great tax write off since i take it as a student you do not have any real money coming in. also you can check it out but do not be surprise if you are unable to find any one to loan you the money unless you are going to come up with a super and it mean super down payment. but if you go for it i will wish you good luck.
June 15th, 2010 at 1:50 pm
How are you going to get a mortgage, if you are a college student?
June 18th, 2010 at 2:33 pm
Well it sounds like a good idea. But weigh the Pros and Cons.
Pros: easier to pay off mortgage and make a little extra money.
Cons: think of the repairs on the house from the people renting.
My parents had a rental building with apartments and they hated it. Some of the people who rented didn’t take care of the place and ruined the walls, carpets, windows etc. There is a lot of responsibilities in being a landlord. What if the people don’t pay their rent? Good luck getting them out. There are laws in some states that protect the “tenant”. Could take you a few months to get a tentant to move out. Think about it long and hard before committing. Good luck. =)
June 20th, 2010 at 4:34 am
Not a bad idea. But do yo have a part time job as well? Depending an the Fair Market Rent in the area, you may not meet the Mortgage Payment,Taxes and Insurance on the property. Also keep in mind That there will be maintenance costs,
as well an insurance policy with rent loss insurance.
June 20th, 2010 at 7:39 am
the problem with this is that even though it is close to a college and you would think that someone would always be renting it for 30 yrs…is that its not logical. you are tlaking about a pretty nice house that most college kids don’t have the money to pay rent for and a house that might not always be rented out. therefore if someone was not renting it you would be stuck with that house bill as well as your own. it is easier and wiser to own a house before you rent it out…pay off the mortgage. it can leave you in a bind if it is not rented out. and just because its around a college does not insure that it will be rented. it would take more than one college student to pay the rent on that house and also when dealing with college students think about the damage that the house will sustain that you most likely will be foreced to fix. taking down the value of the house as well as money out of your pocket.
June 23rd, 2010 at 7:18 am
The big question is can you afford it. Once you buy the house (and the construction is finished) it may take several months to get it occupied. So you will have no income (from the house). Also, if anything goes wrong with the dwelling (as things tend to do), you would be responsible for any repairs. Since it is a brand-new property, you could probably get away with pricing it out a little higher than older properties of similar size. Conversely, depending on if that market offers utilities, you may be able to offer it at a reduced price, but have the tenets pay those.
The first hurdle I foresee is your credit. What is your rating? Many college students don’t know. Every point below 700 can cause you thousands of dollars in interest.
Is this something you really want to do? This means (assuming you have it) keeping the lawn mowed and watered in the summer and making sure the outside of the dwelling is maintained. After all, you would be the owner.
June 23rd, 2010 at 3:12 pm
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