Can a college student buy house, rent it, make payments off rent, and sell it?

I'm a college student going into my fourth year, and was wondering if it's realistic to buy a cheap house anywhere from 100k-500k, rent it, and pay off the mortgage (tax, interest, etc.) with the rent. In case I cant find a tenant immediately, I do have about 7k to help pay for anything.





I figure since the economy is bad and housing is cheap, I could take advantage of this situation. What are your thoughts?Can a college student buy house, rent it, make payments off rent, and sell it?
Yes this is possible-many students have done this but they usually live there themselves with friends. Bear in mind that 7K isn't a lot if your tenants default and you're left to pay the mortgage alone. Factor in gas/electrical safety certificates, possible licensing, not to mention insurance and the cost of repairs should the tenants trash the place and all this may seem much riskier if you don't have an income of your own. And of course finding a mortgage without a job may well prove to be your greatest challenge!





If you're towards the end of your course it may be worth waiting a little longer until you start earning. It doesn't look as if house prices will shoot up in the next year or so.Can a college student buy house, rent it, make payments off rent, and sell it?
In my opinion, the best way to own rental property is to buy it with no mortgage. If you are unable to do this, I would only buy properties that are selling for less than 60% of their value. That way you have plenty of equity in the house should you decide to sell it. It's a risky game to buy a house at value and then hope that you can rent it.
You need to determine if mortgage, taxes, and maintenance will allow you to have a positive cash flow on the property.


You also need to determine how you would qualify for credit to obtain a loan since it sounds like you are not fully employed yet.


I believe that the FHA loans with 3.5% down payment require the property be owner occupied.
Probably not. You most likely have not established a long enough history of credit. Also, the bank wants you to be making a yearly salary so that mortgage is around a third of your expenses. Last but not least the bank only takes into account 25% of the rent money when they consider granting you the loan.





(Also need a bigger downpayment)
First off, do you have at least 20% to put down?


Since this would be an income property and not your primary residence, the down payment is going to be higher, and possibly the interest rate.
Your first answer is correct. 20-30% down payment is required for a investment property. If you plan this i will bet you a hundred to one that you will lose on this deal
Great idea! Go for it!
I hope you're leaning toward the 100k range, because a 500k house (depending on where you live) probably won't rent well seeing as that you'd have to charge enough rent to cover the mortgage...and anyone who could afford that for any length of time would probably just buy their own 500k house. Having said that, yes, it is realistic for you to buy a cheap house and rent it out. Assuming you can get a loan, of course...and yo use the entire 7k as a down payment. Bear in mind that as a landlord, you are responsible for all repairs to the house. If a pipe breaks in the dead of winter, you're the one who has to shell out for the plumber. When old tenants move out, you have to paint the whole place or pay to have it painted, clean the carpet, etc and renters don't always take the best care of the places they live in. You could end up with a rathole on your hands. Also, if you get some tenants that decide to not pay rent for a few months, it is a process to have them evicted, and the whole time you are covering mortgage payments out of your own pocket. My dad just evicted a family that was living in a house he owns. They hadn't paid rent for five months...In fact the entire time they lived in the house (3years or so) never once were they current on their rent payments. They ended up moving to an apartment that cost more even more in rent! Oh, and say some people want to rent your house that you really don't want to rent to. You can just tell they will be a problem.....if they feel that you are descriminiating against them for any reason, they can take steps and MAKE you rent to them! These are all things that you should know before you rent out property.....now, would you like to hear about all the hidden costs there are in actually buying the house in the first place?
The reason housing is so cheap is because there's an abundance of housing on the market. You're not the first person to have this idea, either. The first thing you would need to do is research the rental market in your area to see if there's even a demand for rental housing.





After you do that, you'll have to detemine how much the house will likely cost you a month, and how much you could realistically rent it for in your market.





Unless you have the money to purchase the home outright, you most likely won't profit from this for a long, long time. If you only have 7k period, this probably isn't feasible. Are you factoring in closing costs? Also, if you can't cough up a 20% downpayment, you'll be paying monthly PMI (mortgage insurance) payments on top of the house insurance payments.





Then there's the property taxes, as well as maintenance and repairs. (What if you're offered a great job out of state after graduation? As the landlord, you're repsonsible for the house. Having to sell after 2-3 years would definitely be a huge loss for you.) Will you have the money on hand if your tenants miss a few payments, leave unexpectedly, or require a new roof, plumbing, or electrical work?





I'm not going to say it's completely impossible. Renting can be a good way to subsidize a real estate purchase, but you'll most likely lose a lot of money on the venture in the short term. Research ALL of the potential pifalls carefully before even seriously considering this. Unless you really know what you're doing, it could ruin you financially.
Lets begin at the beginning....how did you pay for college? do you have student loans yet to pay off? If so then forget about owning a house until you have a career and have worked in your job at least 5 years or more. To buy any home you need 20% down plus extra, and need good credit and work experience. I think you're thinking that now is a good time to buy, but the economy has not tanked yet, and it's still to get worse, so with that in mind you might not get a job quickly.





I was a real estate agent plus I'd had my own fixer-upper home and MY rule of thumb is that if you earn $50,000 a year then you'd feel comfortable buying a home at $50,000. If you earn $100,000 then you'd feel comfortable buying a home at $100,000. I suspect any job you start out in would begin at $35,000 for starters. So seems figures don't equal each other.





To be able to rent a house it needs to be considered ';commercial'; property by the zoning department of your county. To be able to buy a home (get it thru the process) you need to make sure insurance companies are writing policies, some aren't or some aren't in specific areas or in certain times of the year. And to protect your home you'd probably need flood insurance too along with the PITI payment. You can't keep a home for a short period of time and make out because your first ';several'; years you'd be paying mostly the interest. Because it's a home there may be a problem with ordinances which sometimes say you can't have more than 2 related families living in a home so be sure and check that county ordinance to remain legal. And, it depends on where that home is because if it's in a community of homes there may be an ordinance regarding parking (where to park and noise). I heard recently that in some places of the country that if the driveway is not paved then people get fined so you need to check things out carefully. Perhaps if the people you have rent your place also are willing under contract to work for you and refurbish the home too then you will make out well. Charge them a small amount of rent and then turn around and pay them for their work, then resell the home. This is called flipping. But you can only sell the home for the work you put in it and expenses like wiring materials (to bring up to code), paint and such, plus salaries plus a tad more. Remember that you can't sell the home for more than the neighborhood is worth so choose carefully. I can't remember if since it would be an intent to flip if you can get a commercial loan or a regular mortgage, so ask.