How to Invest In Real Estate as a College Student
Interested in learning how to invest in real estate as a college student? Investing in real estate as a means of creating a passive income stream has increased in popularity in recent years. People from all stages and walks of life are becoming involved for a variety of reasons. For the college student who is looking to start investing early, real estate investing offers a reliable method of getting ahead in life, and perhaps, even retiring early.
Regardless of your age, it’s never too early to start thinking about securing your financial future.
What Kind of Property Should A College Student Invest In?
The majority of flipped homes and rental properties are single family homes, and a single family property offers a prime investment vehicle for the ambitious college student. For example, if you were to live off campus, unless you are living at home, you would have to pay rent on an apartment or home. The advantage to purchasing a home is that you are no longer required to pay rent. Instead, you are making monthly payments on a mortgage. Over time, your monthly mortgage payments will pay down the amount of the loan against the home.
Should you decide to rent out the additional bedrooms in the home you’ve purchased, you will be able to live their for free, since the additional income stream will pay for the mortgage. Even after you have graduated and moved on from the community, you can continue to rent out rooms to other students and continue to accumulate wealth. If you are able to do this as a college student, it a perfect way to start your investing career.
If you prefer not to get your hands dirty, there are passive methods of real estate investment that will generate returns with a minimal amount of effort.
One of the most popular passive methods is through real estate investment trusts (REITs). This type of trust is essentially a real estate holding company that utilizes funds from investors to invest in different real estate projects. It is similar to a mutual fund, and the types of real estate that a REIT invests in can range from shopping malls to condominium developments. Investing in a REIT requires a minimal amount of capital, but it would be prudent to first speak with a financial advisor.
Likewise, syndications are quickly growing in popularity. A syndication is comprised of a group of individual investors who pool their resources to purchase real estate. As a struggling college student, you may not have the capital required to purchase a condo development, but you may be able to accrue the funds to be 1/5 of a partner on a single family home. Syndications generally arise from relationships, so you should get a jump start on networking.
As a college student, there are a specific number of obstacles that you’ll have to navigate. There will be other investors who may not take you seriously because of your young age but that’s ok. Just continue to educate yourself by reading personal finance books and books on real estate investing. As you begin to become more educated and grow your network, you will see experienced investors take you serious. It may be a struggle to come up with the capital to start investing; however, if you can begin investing while you are in college, then you’ll be way ahead of the game.
Continue to read the articles here on www.youngandfinance.com and you will see the growth in your finances.