There are certain milestones in college such as joining your first club, that epic night out when you turn 21, but buying a house? More and more college students are trying their hand at home ownership, but it doesn’t always work out the way they think. There are certainly some college students who are ready (financially and otherwise) to make a home purchase, especially in an era when people aren’t buying houses to live in for several years. However, is it the right move for you?
Start by working with a local realtor who can explain the process, what you need to move forward, and have a frank conversation about whether or not it’s a good idea. A positive scenario is a college student at an urban campus who’s lived in the area for years and knows the neighborhoods. This isn’t a “college town,” and it’s very likely they can (and want to) find a job after graduation nearby. In this example, it doesn’t make sense to keep renting when rent prices are sky high, they have down payment money and a stable income for mortgage payments.
But what about other situations?
When it doesn’t work
The good news about “college towns” is that there will always be a demand for housing, so realistically you could rent out or even sell a property after graduation. However, do you really want a slew of college kids renting your home, potentially damaging it or not being able to make rent? What happens if you can’t sell it for a profit (or even to break even) and you’re stuck with a vacant property? College town home purchases are risky for anyone but true locals who plan to stick around.
It’s also not a wise move if you’re using student loans, scholarships or grant money to make your mortgage payments. Yes, this money is earmarked for “room and board” but what happens if you can’t find a job right out of college? What if you need some buffer time and have to move back in with your parents? If you’re not sure of your income post-graduation, hold off on buying a house.
When it does
Often, the best students for home ownership or non-traditional students such as those going back for their degree after enjoying a career. There are also high achievers who already have a paid internship in college that will almost certainly lead to a permanent position upon graduation. You know if you’re ready, so don’t blindly leap forward without checking your position.
