Real Estate Advice for College Students

Posted by Pam Hill in HousingDecember 15, 2022(Last Updated November 23, 2022)4 min read
Key Takeaways
  • Wholesaling works well for college students because limited funds are needed to get started.
  • House hacking allows you to live cost-free by renting out multiple rooms, right down to your couch, to cover your household expenses.
  • Becoming a college landlord can pay dividends long-term by providing you with an investment property, and lower your housing costs.
Are you ready to make some real money moves?

Investing in property isn’t something that is limited to adulthood.  College students can, and do, invest in real estate, even while pursuing their studies.  Below are four strategies for launching your property investing career and building a foundation for financial security, all while still a student. 



Form a Real Estate Partnership 

While cash may be in short supply as a student, networks with classmates tend to run deep.  As a consequence, partnerships can be a great way to purchase your first real estate property without borrowing from mortgage lenders, family or friends.  


Under a real estate partnership, two or more investors come together to purchase and manage a property. The investor who has significant expertise and will take an active role in management usually serves as the general partner, while those investors who take a more of a hands-off role serve as limited partners. 


The strongest real estate partnerships are comprised of investors who have complementary skills.  For instance, one investor might be an experienced bookkeeper or accountant and another might enjoy property management and marketing.  Investors can choose to share the financial and management responsibilities of the property equally, or they can split them in line with their time, monetary and other contributions and constraints.  If you form a real estate partnership, hire a lawyer and accountant to hammer out the terms and ensure that the venture is built on more than just friendship.



Wholesale Property

A low cost way for students to engage in real estate is through wholesaling. Wholesaling is an activity in which you serve as the middleman in a transaction. As a wholesaler, you find a property that is not currently listed, contract with the seller to sell it at an agreed price and terms, find a buyer and contract with them to sell it at a higher price than the sales price, and keep the difference as profit, also called the assignment fee.  


The demand for wholesalers is significant as real estate investors are always looking for undervalued diamonds in the rough.  As a student, you have the opportunity to get to know a particular neighborhood and specialize in it, becoming a valued asset and partner for investors. 


Your investment cost as a wholesaler is principally the time you’ll spend finding leads, which are usually distressed properties. Wholesaling real estate is best suited for investors who have more time than money, and while college students are definitely busy, they usually have far less money than time.  Another advantage of wholesaling is that it does not require taking an exam or obtaining a license, like becoming a real estate agent.  So if you have transportation, even a bicycle, to canvas neighborhoods, enjoy meeting people and like sales and marketing, wholesaling may be a great way to enter real estate. 



Become a College Landlord

Another path to real estate investment is leaving college dorm-life behind and buying a house or duplex.  College towns are often prime investment targets because rental demand from undergraduates, fraternity and sorority houses and graduate school students remains strong year after year. While at first blush buying a house might seem way outside of your budget, if you are renting or paying for dorm housing, a quick back-of-the-envelope calculation might reveal that a mortgage payment would be even less than your rent.  And that’s before finding roommates to effectively pay the mortgage. 


Of course, you’ll need funding for your down payment and closing costs, but if you attend college in a low-cost part of the U.S. where single family and two-family houses can still be found for less than $100,000, then with an FHA government loan the down payment can be as low as three percent, if your credit score is 580 or higher. 


And of course, if you decide to move from your college town after graduating, you can continue to rent your property and allow the cashflow to support future investments.  As an added bonus, the skills you will learn as a landlord will serve you long after you graduate, putting you years ahead of the learning curve of most property investors.  Additionally, being a landlord provides you with valuable leadership, operational and financial experience, skills that will be sure impress future employers.   



Start House Hacking

House hacking allows you to view your home as an investment rather than just a roof over your head.  House hacking involves generating income from your home by renting one or more rooms in your house, right down to your couch.  Your aim is for your tenants, be they a collection of guests staying in weekly spurts, or a few long-term roommates, to provide you with rental income that equals or exceeds your rent obligation. At it’s root, house hacking seeks to have your tenants pay your household expenses and allow you to live as close to free as possible.  With escalating housing costs in today’s inflationary environment, house hacking allows you to lower your cost of living, and put the savings towards a down payment on a home or other investment.


Importantly, if you are renting your residence, you will want to ensure that taking on tenants does not violate the terms of your lease.  While the short-term profits can seem attractive, the longer term consequences of losing your housing don’t outweigh it. 



The Bottom Line

College is an opportunity to make new friends and explore new subjects.  Real estate investing can help lessen the cost of your education, while providing valuable life skills.  Best of all, you don't have to sacrifice your current lifestyle, you can couple wholesaling, house hacking, or buying a property with college staples such as joining a club, studying abroad and participating in campus life. Key is to develop a strategy that fits your interests, spend time preparing and researching, and take a long term view. 

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