I am 22 years old and graduated college last December. I have a full time job now, as well as a side job. I have invest my money and have a good savings account. I looked at a house in Poughkeepsie, NY today near where I live. It is a 1920, 3 bedroom, 1 bathroom, recently renovated. Priced at $112,000. Interested in renting to some college students, (Marist college is one mile away) or other renters. While I am not currently with a broker, I did pass all of my real estate licensing courses, and am interested in investing young without a huge risk!
Thanks! I can give any more info if needed.
You are doing yourself a great favor by starting at such a young age. You have the power of compounding earnings on your side.
For this house, is it going to need any work done to it before you can rent it? How much monthly rent will you get for this house by renting to college students vs non-college students?
Best wishes for your future success
Thanks for your reply Sharad. I am hoping at a younger age I can afford to take a little risk, with hopefully a reward there.
The house was built in 1920 and still has some old charm and character but it was last bought in 2006 and has recently been redone. New roof, siding, paint, brand new carpets, kitchen appliances, bathroom finishes, and more. There is really no real work that would need to be done. The garage out back however is in pretty bad shape, so I am not sure if it would qualify for an FHA loan then, but I was told I can get a good rate anyway through conventional loans.
I am still researching the average rent in Poughkeepsie for homes..lots of condos and townhouses, not full houses. The owner of this house rented it to a single man for 1,000, yet said I could easily get 1,600. For college students, I could probably get over 2,000 if I wanted too.. Marist room and board is very expensive. Still trying to find out if there are a lot of potential renters.. I wouldn't want to have an empty house..I would just have to move in then!
Just remember you can't do FHA or any other low down payment loan if you aren't going to live there for at least one year. For straight investment you'll need 20% down or maybe more depending on your bank.
Also, 1,000 to 1,600 to 2K is a huge range. Call around to other like listing and narrow it down to within a $200 spread.
Congrats on graduation!... Now real life starts ;)
Like stated above find out a real rental rate for the house. Don't listen to the seller. If he said you could get 2k for rent.. why did he settle for 1k.
Find yourself a good broker. You don't need 20% down for an investment property. I've seen them at 5-10%. There are a lot of banks that deal with commercial loans that have programs set up for investment properties.
I like that you are looking at a property in a college town. They are normally stable growing areas. Only thing that concerns me is the 3/1. Can you see yourself living with two other girls while sharing one bathroom? If you guys planned on going out one night you'd have to start at noon to get everyone ready. Then again if there's not a lot of new construction and older homes are the norm then its fine.
Also, you state that the college R&B is expensive. Do they make freshmen stay on campus or do they allow them to live off?
Just remember how you were in college and how you treated stuff. Your going to have that taking place in your property. Have a nice slush fund ready to replace broken windows or nasty beer/puke stained carpet. Take a large deposit and keep an eye on the place. If you can make it through your first couple properties you'll be fine.
Most importantly find a strong rental rate, taxes and insurance on the place. Everything pretty much revolves around this and then you can go from there.
@Josh C. is making some great points about rent variance and FHA loan.
How much did the house sell for in 2006? Is this a distressed sale?
What a small world, i have a good friend who invests in campus housing around Marist. Best of luck!
I read that I cannot do FHA unless it would be my primary residence. As
@Watson Smith stated, I believe there would be other ways to secure a loan for an investment at a lower percent down. The reason why he said he charged less is because he had one single male renter. I would be looking for more people, and if it were a college rental, would charge per person/room.
I actually mistyped, the house is 3 bedrooms, 1 full bath, and 1 half bath, which would help alleviate 3 girls in one bathroom at once!
Freshman and Sophomores are guaranteed housing at Marist if they want it, but juniors and seniors are not, and there are not enough rooms to go around-so many move off I have heard.
The house sold for $82,000 last.
@Andrew Syrios would love to talk to your friend to learn of his experience!
Thank you all for your responses! Learning a lot already and trying not to jump in to something too quick just because I think it's a good opportunity.
I bought a condo when I was in college (I graduated a few weeks ago so still getting used to the past tense) and lived in it and rented out the other 3 bedrooms to friends. You're right in that you can usually get more in rent by renting out each bedroom.
It seems like you'd prefer to start investing but not tie up too much money. Why not do an FHA loan by living in one bedroom and renting out the other two to friends? You're going to have to live somewhere. Run the numbers and see if it makes more sense to rent an apartment and buy this place, or buy and live in one of the bedrooms.
Also, it sounds like the property is listed at FMV. Why not take advantage of being an OO buyer and try to get a good deal on a HUD or FNMA property? I did that for my first property and saved good $$ by not having to bid against investors.
The best advice I can give is to not rush into a deal. If you have any questions, feel free to reach out. Good luck!
I hope you have enough experience with normal home repairs to call the right repair person such as plumber, electrician, HVAC, handyman, painter, cleaner, carpet cleaner, handyman, etc. Then using the correct rental contract especially for college students, and knowing the correct procedure to evict renters is needed to take some of the risk out of your investment. You also may need to find a good property manager (do your home work on this) to help you through your learning process and getting the correct renters and a large deposit for repairs. I know a PM takes from your profit but may save you money though your learning curve. Just my two cent worth of advice.
You are on the right track with your future and good luck in your investing.
@Mills Shenkman welcome to the site.
Welcome to the site ..congrats on graduating ..I remember being in college and thinking I would buy my first property at 22..unfortunately it didn't happen for me but happy to see it happen for you.. I'm down In Rockland but know someone who actually rents out to Marist kids .. They've got a few out there and seem to really the college rental market
Thank you all for the advice. Glad I posted.
@William Donaldson I was considering doing that. I live at home right now, rent free luckily, so I have to consider that as well. However it would also be good to live there, even if for a year, to qualify for the FHA loan and rent to friends. This house is so appealing because it is move in ready, but I am going to look around and see if there are any good homes available for cheaper. Many in Poughkeepsie are cheap, but would need a ton of work.
@Bill Anderson good point! I luckily know a good amount of people who are very handy with home repairs and things like that. Unfortunately, I myself am not very experienced with these things, so it is good to be able to know people that would be willing to help. I was considering talking to a property manager as well, especially if they have more experience with college students. Trying to find some investors in this area who rent to college kids or people with more experience to bounce ideas off of.
@Justin F. Well it may not happen for me either lol, have to still see if I can afford it. Would also love to talk to your friends who do this in Poughkeepsie!
@Mills Shenkman Welcome to the site! I'm looking for my first property near Peekskill, and it's great to find another investor near Westchester. You should consider yourself lucky to have access to affordable homes up north. I know I don't have all the answers now, but I'm hoping to dive right in and try to learn as I go. Best of luck on your first deal!
@Nick G. I think Peekskill is a little far from me, so I'm looking closer to White Plains now. I think if you are looking for a property in Peekskill that there seems to be an investor friendly property management company up there that posts on Craigslist a lot. I forget the name of the company...
Devise a plan on paper. Once its on paper, you will have a greater understanding of what you can gain and what will be your loss. You can then use this information to determine if it is worth the risk involved.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!