<p>I attend school is a fairly large area. There are a lot of nice looking older homes, that would look really good if fixed up. Lets say I was to buy a house junior year, live there for two years, and do some minor fixing up. Hopefully when I sell the house, after graduate, I'd come out with a profit. Is that a smart thing to do, or should I stick to renting?</p>
<ol>
<li> Where are you going to get the capital to finance the purchase of the house+pay for upkeep+improvements?</li>
<li> If you're at UN, is the surrounding market expanding or contracting, what's the housing market like? Net gain in population over the last 4 years?</li>
<li> It's a terrible idea.</li>
</ol>
<p>buying a fixer upper as a house while you're in school isn't a great idea. When would you honestly have time to fix it? Weekends? summer? and where would the money come from for contractors to do the more major work? A coat of paint is one thing- replacing a roof or drywall is another. Additionally, what happens if you can't unload the house quickly enough when you graduate? can you afford to pay the mortgage on a house you're not living in while you're renting another place where your job is? Or can you afford to pay the mortgage on a house you can't live in while major work is being done?</p>
<p>All things to think about. Talk it over with your parents or another adult who's owned a home for awhile and find out what having a mortgage and really owning a home will cost you in terms of time and money before you consider an investment...for such a temporary housing situation, you might be better off applying the money you'd pay for the mortgage to rent.</p>
<p>Also, a mortgage requires capital- you can't just approach the bank and ask for a few thousand dollars. Down payment is usually 20% of the loan value. for a $250,000 home, that's $50,000. Where's that going to come from as well?</p>
<p>When I mean fix up, I meant do some minor landscaping, clean it up, and put up some paint. I don't mean putting in a finished basement, new cabinets, new bathroom tile etc.</p>
<p>Older homes could be a money pit. What happens when the roof leaks, furnace does not work, bathroom on second floor has water leaking to the first floor, or the hot water heater dies. These are expensive repairs, and many require a licensed professional. Don't get over your head, it isn't necessarily just a matter of a fresh coat of paint. When in college you won't have the time, or money to deal with it.</p>
<p>possibly the stupidest thing i ever heard. </p>
<p>no bank is going to give some 19 year old a mortgage. mowing the lawn and painting the rooms isn't going to increase the house value. the market is slowing. you don't realize the expenses of owning a house - there is home owners insurance, there are taxes, there is a mortgage payment. if you plan on renting it out to other people to help pay for this, you will be the landlord - responsible for things for all additional expenses. </p>
<p>i don't think you've thought this through at all.</p>
<p>jags is right. Now, I know a parent of a graduate student who purchased a home. He rented out bedrooms to a few students, and played landlord. I suppose that he felt that his D would live rent free while in grad school (since he was hoping to make a profit). I don't know if he did, but he also did not purchase a "fix me up" type of home, he had plenty of money, and he had the time to deal with all of the headaches.</p>
<p>Many have done this and done well depending on the market. Two years is too short to see much profit today. If you were panning to stay on and work there it would make more sense--possibly. The costs of ownership can be high and surprising on an older home. A couple thousand here a couple thousand there and if you don't have it the house might go down in value.</p>
<p>Consider that buying and selling a house come with costs - often, 6% of the home's value to the broker. A mortgage will have you pay mostly interest up front, and then very little to principal. At the end of two years, even assuming that you don't lose money, you aren't making money, either.</p>
<p>Try to find someone who would buy it as an investment and let you live in it in exchange for painting, repairs, landscaping, etc. (You can probably tile a bathroom by yourself or lay down linoleum in the kitchen.)</p>
<p>i think buying a home during college especially to live in is a great idea. i think the people who have not so great opinions or feedback don't see that they're throwing their money away on dorms to share a room with another person, when they could be making money from renting out a room per person in their home.</p>
<p>also if you estimate housing to be like 8,000 per school year it's like wasting 36K on housing that isn't even tax deducatable, at least with a house you can put it on your taxes.</p>
<p>plus you never know if after graduating from school you might find your first career or job within the city you attend schoool. you can always rent the house out when it's done.</p>
<p>i know at least where i live, my place would be the perfect place for local university kids to rent out and easily make a profit.</p>
<p>liek0806,</p>
<p>the point is even if he could get a mortgage, which he most probably couldn't, and even if he did have around $50,000 or so for a down payment, which he probably doesn't, and even if he did have a way of paying for the mortgage whiles he's still in school, which he probably doesn't, and even if he was responsible enough to be a land lord, which he probably isn't, theres no guarrentee that he'd make a profit - or even break even after 2 years.</p>
<p>Also unlikely to need the tax deductions. Unless you were doing this 3 years ago it just won't make $$$ sense over just two years.</p>
<p>assuming that it isn't him purchasing it, then that will mean it's most likely that he's also not paying his housing at school, which then could easily mean his parents buying him the house. whatever the situation their is always more benefits to getting a home than spending one's money endlessly on housing that is shared (and not tax deductable)</p>
<p>even if he or his parents didn't make a profit at selling it, at least he or his parents can put it on his taxes.</p>
<p>when iw as considering schools back in the college admissions process, my number 1 school was in nyc, and you bet i was not going to waste 10K of my parents money per year on a room i have to share that i can't even call my own, nevertheless for 4 years.</p>
<p>It all depends on the market. If rents are low but buying a house is expensive renting can be cheaper. If home values are high and go down the next two years as many predict you will be losing doubly. This is likely in Boston, LA, SF, Miami and some other big cities. Deductions are only worth maybe 35 cents on the dollar so you are still putting out lots of cash each month. For a realistic example a house near UCLA will cost $700,000. The monthly payment and taxes will be $5,000 a month. You might be able to rent a similar home for $3,000. Even with a 35% tax deduction saving you are losing $250/month. If values go down 10% you are out another $70,000.</p>
<p>HAHAHAHAHAH.</p>
<p>HAHAHAH.</p>
<p>Sorry. CONDOS near UCLA start at 900k. I'd say houses are closer to 1.5 million. And up. 700,000 would probably have been accurate about 6-7 years ago. </p>
<p>This doesn't do anything but reinforce your point further, but yeah. Just saying.</p>
<p>You really need to crunch the numbers for your area. Two years is a very short turn around time. We bought a condo for our D. because decent rent for a 2BR apt was going to run about $600/mo. Bought condo for 73K--put in 3K in repairs and upgrades. Interest on loan was at 3%--payments 450/mo. She has roommate that pays $275 plus 1/2 of utilities. Condo next door (identical unit minus upgrades) just sold for 82K---so think we are going to do okay. Our main idea was if we could break even, we would be way ahead of paying out rent.</p>