How can I house hack as a college student

Question

Next year, I'll be a junior in college living on campus, and I want to rent my own apartment because I won't have student housing anymore. Since I'm interested in real estate, I'd like to consider a duplex with an FHA loan and rent out the other unit. How should I go about it? Thank you all!!

Theresa Harris · Answer

You'll have to get approved for a mortgage.  So depending on your income and savings, you may require a guarantor.  I got my first place when I was a grad student.  I had 5% down and my parents had to co-sign the mortgage as my income wasn't high enough (not surprising as a full time student).  I made all of the payments and rented out a room to help cover the expenses.

If you are buying a condo, make sure you go through the condo docs carefully to see what is allowed, how much fees have increased over the years and if there were any special assessments.

Jake Handler · Answer

Don't rule out something as simple as a 2 bedroom condo either!  You can rent one room out to a friend while living there, and of course keep it as a student rental when you move out.  Definitely go for a duplex if you can, but if that doesn't work out, don't rule out something smaller to get started.

Eric Mensah · Answer

Hi Nana,

I am called Nana too (middle name) and I am currently on my second house hack. First make sure you have a source of income. I think a duplex is a good start. Before you get pre-approved, make sure you calculate the numbers. Find out how much each unit rent for. Since you will be living in the same area, drive by and ask people in the area what the rent is. You can also check on biggerpockets. Then find out what the Insurance and taxes is. With the current mortgage interest rate and the price of the property, you can calculate how much you will be paying out of pocket with house hacking.

It's good you are starting early. Good Luck.

Luke Feliciano · Answer

You can buy a duplex using FHA and actually use the side you won't be living in toward your qualifying income. It has to pass what is called a self sufficiency test but when you get an appraisal done on a multifamily home, it includes a market rent analysis which the appraiser determines the rent values of the home and the area that it is in. From there, you can usually count 75% of that toward your qualifying income.

I'm not sure where you are located but I'd be happy to help provide some more information to you. Feel free to DM me!

Nana Ofori · Answer

Thank you, Mrs. Harris. I'm glad to hear that you were in the same position that I want to be in. Thank you for commenting on my post and for your help. If I have any questions, can I feel free to reach out to you? thanks

Nana Ofori · Answer

Thank you, Mr. Warlow, for your thoughts and contribution. I really appreciate the advice.

Tyler Warlow · Answer

Hey Nana, I haven't personally done this yet, but here's a high-level summary of what I've learned since joining bigger pockets. If anyone wants to add detail or correct me, please feel free. I am also here to learn.

1. Get preapproval - If you have no income as a college student, you will likely need someone to cosign the loan to get approval. This will tell you how much home you can get.

2. Find a local investor friendly agent - Give them your criteria. This should include location, price, property type, beds / baths, etc. The more detail you can give them the better. The agent can send you a list of the properties that meet your criteria.

3. Analyze deals. Be sure to learn the area and understand comps. Be conservative with your numbers, especially in today's market.

4. Make offers that work based on your numbers. Be prepared to get nos. Don't stop making offers.

5. Offer accepted, go under contract. This is when you do your due diligence such as home inspections. Potentially renegotiate based on due diligence.

6. Close.

7. Move in and rent out other parts of the property. Do your due diligence with tenants and screen them.

Bonus idea: Don't be set on one mode of house hacking. As a college student, you would have a good opportunity for rent by the room, and it is not a huge change in lifestyle. This could potentially give you more cashflow.

How can I house hack as a college student

Most Popular Reply