Millennials First Home Purchase - Are You Ready?

Written by Posted On Wednesday, 11 June 2014 16:01

After taking that really fun trip all over the country with Mom and Dad last summer you've settled on a college. You have always heard from your elders that you should own real estate at some point in your life and not throw your money away on rent (it's very true!). With a conservative estimate on average, real estate overtime will yield higher than 33 percent return on investment (ROI).

So if you can swing it, owning in a college town is a lot more efficient than renting. If you are in a position to buy as you are going through your time in school then it can be a great pay off for when you graduate.

Once you graduate there will be another student starting where you did, looking for housing during their college years. Maybe they don’t want to live on campus. So this begins your cycle of becoming a landlord with your first investment property, which can possibly support your living circumstances as you move on in your life and career after college.

Tips and things to consider when choosing your first investment property:

  1. The larger your property, the greater chance more people will inhabit it.
  2. How much will it cost as each tenant departs to rehabilitate the property for a new tenant (carpet, paint, etc)?
  3. If you are buying a condominium, how stable is the homeowners association?

With the above-mentioned, sometimes it is more efficient to buy a one bedroom den with 2 bathrooms verses a 2 or 3 bedroom unit. This will lower the rehab costs in between renters and simplify tenant turnover (likely you will only be dealing with one at a time).

For further information, check out this piece from the LA Times on buying a condo near a college.

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