housing during pharmacy school

[northtexan]

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Have any of you guys owned a house during pharmacy school instead of renting? Ive been renting my whole undergrad and hate just throwing away money without gaining equity. I feel that it is a good chance that by owning a house you could then sell it after school and end up spending less money than renting a place for the 4 years. Or even staying in the house and working around the area.

 

[Amicable Angora]

You got a rich family?

 

[BMBiology]

Unless you are buying at the bottom of the real estate market and paying with cash, it is going to be tough to make any money when you sell it in 4 years.

The cost of selling a place is around 5-6%. Annual property tax and maintenance cost. Mortgage interest rate is around 4%. Getting a mortgage is much harder nowadays.

 

[BMBiology]

It was crazy back in 2006. My friend's sister has two properties and she was just a student like us. She was living in one apt and renting out another.

 

[Ackj]

Probably not worth the headache. Most of the time renters do not need to mow the lawn, shovel snow, fix anything. Definitely not something you want to be doing when you've got an exam and homework.

Financially, it might work if you rent it out in addition to living there yourself. If you can get 2-3 roommates and get them paying enough rent to cover the mortgage you may end up ahead. Still, going to be tough to buy something without a decent down payment, and there will be plenty of fees and expenses that will eat into any potential gains.

 

[RPh Who]

Not worth it for just 4 years of rent savings. See historical trend and bubble formation.

 

[confettiflyer]

I've owned in undergrad and rented in pharmacy school...owning/managing is a lot of work, stick to renting, too many variables in play the next few years.

 

[WVUPharm2007]

I lived in a mobile home. 2BR/2BA. I bought it for $10,000. Rent was $200/month, including water, sewage, and trash. Then after 5 years in the thing, I sold it for $7000. Add it all up and I was paying less than $400/month to live. A comparable apartment would have been about $900-1000 a month. I feel that it was one of the wiser choices I made.

 

[rph3664]

I wouldn't recommend buying. In addition to all the other things people mentioned, what if you have to relocate after graduation, and have trouble selling it?

 

[accordman83]

I did this while in pharmacy school...but I went to school in a very low cost area (I paid $49k for house). I would only do this if you can find something decent, simple, and cheap that would be easy to sell if needed. Also consider crime rate in the area. My house was in a very good pretty much crime free area only 2 miles from my school (which is not typical of many schools). Most places cheap will not get you that. I would say in most situations it is just better off renting and maybe getting a roommate or two to avoid the potential hassle of home ownership while immersed in school.

 

[EyeTeeFarmer]

Not advertising, but with sites like AirBNB, etc., you can really rent it out while you are still living there. Pretty much minimal administrative fees. Issue vs. having a proper tenant is steady income. Pros are potential to make much, much more than a steady tenant, especially in a desirable area of town. But either way, yes you'll have to pay taxes and such.

I can see what people are saying about it being a headache, but determine what owning vs. renting will cost you and then decide. For instance, rent here in the south at a desirable city location for me is 1300/mo for a 1BR, 650 sq.ft apt. That works out to a lot of potential mortgage and tax money for 4 years.

 

[confettiflyer]

I mean...realistically, does a student even make enough money to make the itemized deductions (vs. just the standard) worth it? I mean, issues aside about obtaining the house in the first place (mortgage approval, all cash transaction, etc...), unless you've got a lucrative side job or other business that you're trying to pull yourself back in to a lower bracket.

So with no real tax benefit, closing costs, 5-6% in transaction costs related to selling, the potential for a maintenance bomb if not properly inspected, time spent on renting out the property/finding tenants, additional liability/insurance costs for possible commercial operation (airbnb), on top of the uncertainties of where you'll be in 4 years... I just can't see this panning out, unless there's an operating assumption that house prices will rise 10-15% a year over the next 4 years, or there's a very very strong likelihood the OP is staying in this house 7-8 years after acquisition...or if the rental market is extremely robust.

Just me thinking out loud...maybe it could work, don't know enough info.

 

[297point1]

I've often wondered about buying an acre of land within 5-10 miles of campus and setting up maybe 20 of these microhomes for yearly student rentals:

They'd pay for themselves in 5 years max...
But do I really want the headache of being a landlord...and have my own students as tenants? I haven't been able to convince myself that I do.

 

[EyeTeeFarmer]

I've often wondered about buying an acre of land within 5-10 miles of campus and setting up maybe 20 of these microhomes for yearly student rentals:

They'd pay for themselves in 5 years max...
But do I really want the headache of being a landlord...and have my own students as tenants? I haven't been able to convince myself that I do.

So.. a modern day Hooverville. Make sure to choose a liberal arts college and advertise it as a "green" community.

 

[TheBlaah]

I bought a property at the beginning of pharmacy school (back around the housing bust so houses were very cheap) for ~40k for a 3 bed/2bath. Had a couple of friends as tenants for really low rent which paid off taxes/utilities/depreciation and ended with a little profit. At the end of pharmacy school 4 years later, the property ended up selling for ~85k.

But housing value around my area is stabilizing. I'm not really certain how profitable it would be nowadays.

 

[confettiflyer]

I've often wondered about buying an acre of land within 5-10 miles of campus and setting up maybe 20 of these microhomes for yearly student rentals:

They'd pay for themselves in 5 years max...
But do I really want the headache of being a landlord...and have my own students as tenants? I haven't been able to convince myself that I do.

This is genius, but....

1) Conflict of interest you alluded to -- if a student was late on rent, and concurrently got a poor grade in your class, how much of a headache would it be to defend against an accusation of bias?

2) You're going to assume students are going to want to move into these. I don't know about you, but with the amount of money flowing from parents and/or financial aid, the most pressing questions weren't, "How much is the rent?" but "Is there a counter that will receive my Amazon packages while I'm out and alert me via email?" or "What kinds of amenities are in the common areas?"

For further evidence, the apartments on campus at my alma mater:
https://www.americancampus.com/student-apartments/ca/irvine/vista-del-campo

And here's the trailer park that was paved over in 2004:
http://previous.lib.uci.edu/chronicles/index.php?page=students&function=irvine

 

[rph3664]

Ames, Iowa used to have Quonset huts, constructed for all the GI Bill students who came in after WW II. That "Tiny House" post reminded me of this. That community existed until the 1970s, and was used for family housing.

 

[297point1]

This is genius

High praise, coming from you!
(I'll pretend I didn't see the rest of your post)

And here's the trailer park that was paved over in 2004:
http://previous.lib.uci.edu/chronicles/index.php?page=students&function=irvine

I thought I saw @WVUPharm2007 and his double-wide in that picture...

 

[confettiflyer]

High praise, coming from you!
(I'll pretend I didn't see the rest of your post)

Haha...hey if you find the right student population, you can make it work.

Then you can change your SDN title from Mr. Nice Guy to "297point1, SDN Slumlord" legitimately.