Save for college tuition or save for down payment??

Question

Hi all,

I've been in a serious pickle recently about how to approach my real estate investing future. I'm 19 years old and will be entering my sophomore year of college this fall (2019) and can't decide how to deploy my savings!

My question is whether I should pay cash for my college tuition as I go through school or rather save the money I make and take out student loans so that I can invest in real estate sooner. Here's how I see the pros and cons...

Pay cash for tuition as I go:

- Little to no debt out of school

- Much later start on investing bc I have no savings post-college

Save to invest in RE:

- Monthly cash flow and wealth building at an earlier age

- Straddled with student loan debt right out of school

- My money goes towards an income producing asset

Does anyone have any thoughts or recommendations? It's kinda tearing me apart :/

Thank you in advance. Appreciate it as always.

Best,

Tucker O.

Theresa Harris · Answer

Not knowing how much savings you have, I'm guessing you don't have enough for a down payment for a house which you could buy and live in while going to college (and rent out rooms to cover the mortgage).  That would be my first suggestion.

If you take out  student loans, how long do you have after you graduate before you start paying interest and what would the interest rates be?

Why not keep saving, take out student loans and see where you are at when your graduate?  If at that point interest rates on your student loan are less than mortgage rates and you have enough to buy a house, buy the house.  If the interest rates on the student loans are significantly higher, then pay those down.  By saving as you go to school (ie keeping costs and spending to a minimum), you will be further along in the end.