College Student Bought Home Instead of Renting
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I just heard this story from a friend of a college student, lets name him John, who made quite the gutsy financial decision that ended up to work well for him.
Eight years ago in the fall of 2000, John was an entering freshman at the State University of New York at Buffalo. As he might have learned from other college students, it is cheaper to rent off campus than to pay for school housing. So, he intended on looking around the school’s area for a place he could rent.
He found a home that fits his needs where one room was $600 rent. The home was not very big and it was snug after three or four students lived in it. John thought that since he was going to be living there for 4 years, why not think about buying the house if there was a chance he could profit from it. He contacted the owner and the owner asked for close to $40,000. John jumped on the offer and bought it with loans co-signed by his parents.
Through the years, John has been renting rooms out to fellow students while repaying his loans and he has continued to do so even after graduating. He is now 3 years from paying off the loans. He will soon be collecting rent for profits and be awarded for a great real estate investment.
This feat may be a great way for anyone get ahead on the real estate game during college but it is rare to find someone willing to sell their homes. John was quite fortunate to find someone willing to do so. I would definitely like to be in his shoes but there is a ton of factors towards finding the right house.
Nowadays, it may be hard for a college student to pull off something like this but the deteriorating housing market may open some doors. Real estate isn’t as cheap compared to 8 years ago and people are smarter now with management of their properties.
Nonetheless, maybe someday, another young fellow could wreak the benefits of making a similar financial decision.
Photo credit: rustytanton
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11 Comments on this post
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Funny about Money said:
Excellent move! This is a maneuver that I have long thought is wise for college students and wise for parents to help their students accomplish. It’s especially doable in a town like Buffalo, where real estate prices (compared to other parts of the country) are depressed.
September 8th, 2008 at 9:48 pm -
MoneyEnergy said:
Yeah, and it would be rare to find someone willing to sell such a cashcow for only $40,000….. that’s where John really got lucky. But this is something that I’d love to do.
September 16th, 2008 at 12:59 pm -
Elizabeth said:
I live in a Big Ten college town, about 2 miles from campus and the hospital. What we’ve seen is that parents buy a house for their kid to live in and act as landlord. I suspect this is going to happen less as the market is less stable, but it’s an interesting idea, especially for families with multiple kids attending the same school or who will do both undergrad and grad school.
I only wish 40K got you something in our area!
September 17th, 2008 at 9:48 pm -
Jennifer said:
I had a friend in college who used a settlement she got in an accident to purchase a house across from campus. For the first two years, she lived on campus and rented the house out, and her final two years she lived in the house and rented out the other rooms. It was a great situation for her… my dad and I discussed purchasing a house in the area where I went to school, but we never did. I went to school 3 hours away from home and wasn’t sure I was staying after I got my degree, so it just didn’t make good sense.
September 18th, 2008 at 3:27 pm -
Jerry said:
That’s a smart kid. I’ve had friends who bought when they were in medical school but certainly not as freshman. That is a gutsy kid. I’m sure his shrewd decisions now will lead to wealth in the future. It’s good his parents co-signed but you need that insurance that the loan will be covered in case you can’t rent. Kudos to him.
JerryJune 11th, 2009 at 9:58 am
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