Question from a reader:
My name is Jordan, sorry this wasn’t a PM, it seemed as if the link was broken. I am interested in buying, and consequently renting out house. It seems as if no one really takes me seriously in this, as I am a college student, and young. Could you give me some advice, or some pointers? I am thinking that if I do as I read, in your article for college students, I would live in it, and also rent out the house to other students. What do you think?
Jordan, don’t let the naysayers get you down! That’s the main thing. There are tons of people out there that will doubt you and your intentions to buy a house but those are not the people you need to be listening to at this point. A little story …
When I was just starting to get into buying rental properties, and before any had been bought, I contacted a Realtor about showing me some houses as potential rentals. My wife and I had already used this Realtor to buy our primary residence and were able to get a bank loan at the time, even through we were both students. That is not something that I cover in the College Student House Buying Guide because it’s pretty much impossible to do these days without a cosigner. Anyways, the point is that we had ALREADY used this Realtor and when I asked her about showing me houses for potential rentals, she hardly gave me the time of day! It was very disappointing. In fact, almost every single person that I told about our plan to start buying rentals pretty much wrote it off as a crazy idea. Not just family and friends but banks and Realtors too!
After buying my first 3 rentals, I chanced upon the same Realtor and told her that we had gone ahead and bought 3 more houses. She was stunned and only then wanted to “help me find some more properties to buy”. Well, by that time there was no way I was going to work with a Realtor that wouldn’t give me the time of day a year earlier.
Of course, for them it’s a matter of evaluating whether a sale will occur and whether they’re willing to put in the time when there are uncertain outcomes. I get it, they don’t want to waste their time on dreamers. That’s why many Realtors require that you get preapproved for a loan before they even start showing you homes.
In closing, my best advice to you would be to think outside of the system. The system tells you to get a job, make enough money so you can get a bank loan, then hire a Realtor to buy your house. When you free yourself from thinking in this way, opportunities arise that were never there before. Can’t get a bank loan? Well try finding a seller who will sell on a land contract or lease-to-own. Realtors won’t talk to you? Well again, that’s fine. They are rarely creative and will only end up showing you full price houses straight from the MLS. Lame.
Oh, and lastly, the idea of buying a house, living in it, and renting out a room or rooms to other students is precisely what I would recommend. It’s an awesome idea and really works well for everyone involved. Be sure to have your renters sign rental contracts though even if they are your friends, keep it professional just in case.
Please feel free to get in contact with me about more specifics of your particular situation and the best of luck to you.