Owning a home/Renting rooms

[2thDoc11]

Hello! Just wanted to hear about others thoughts and experiences. I was just wondering if anyone in dental school has bought a house and rented out the bedrooms to other students? I've been getting interested in real estate and have heard that it can be a great way to live and make your own living expenses a lot less or possibly even make some money out of it if done correctly. I'm sure it depends on where you live but I do think it could be a great idea if you an find a decent house that would be somewhat convenient for school.

Thoughts?

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[oralcare123]

You need to carefully calculate in case you are borrowing majority of the cost of the property. You also need to ask yourself if you are the right person for that. Property ownership is hard - you might need to prepare for a tough exam and fix toilet at the same time or urgently search for a cheap fridge
Even though interest rates are low, houses around universities are quite expensive. Buying something needing fixing always a great idea, but then when are you going to study?
What skills do you have ? Can you unplug the sink or a toilet? Drywall, paint, flooring?
If you don't have skills and/or money, I wouldn't advise to purchase
Please carefully assess the risks of failing dental school, because you tried to bite too much

 

[Molar Whisperer]

I had a classmate who flipped houses and cars and would sell to pay for tuition. Granted it was in the mid 1990s as tuition and property in my state was super cheap. He would buy a house for $17k and sell it for about double. I think that is too much financial risk and work during school. From numerous observations and sources, the magic number is living in a 4 unit property (4BR or quadplex) and renting the other 3 units. If you structure the taxes and business expenses optimally, you basically live for free and have the mortgage paid for plus profit. If you haven't committed to DS, you might find this venture more lucrative.

 

[cluelessdr]

i bought a house in my first year and rent out a bedroom works out great

 

[2thDoc11]

i bought a house in my first year and rent out a bedroom works out great

Yea! Idk I’d have to wait to see where I’d get accepted and have to do a work up to see if it’s a smart move both financially and related to school/studying.. I know oralcare123 made some good points but I’ve also hear that students have plenty of time to themselves when they aren’t studying.. I’d forego a night out on the town for house work if it means I’m saving thousands of dollars then I would if I were renting.. plus that’s an asset you can continue renting out to students and later sell if you choose too.. my brother has several properties and my sister is a realtor so I wouldn’t necessarily be alone in this venture either.. they have a lot of knowledge about how everything works

 

[Molar Whisperer]

Are you familiar with bigger pockets podcas?

Not until now. Thanks for the tip! I wished I'd had known all these strategies 20-30 yrs ago.

 

[2thDoc11]

Not until now. Thanks for the tip! I wished I'd had known all these strategies 20-30 yrs ago.

Yea their bigger pockets real estate podcast is really interesting and motivating I’d love to be able to do both but I sorta wanna do the “house hack” in school where you rent out the bedrooms but we will see

 

[Molar Whisperer]

Yea their bigger pockets real estate podcast is really interesting and motivating I’d love to be able to do both but I sorta wanna do the “house hack” in school where you rent out the bedrooms but we will see

I saw first hand an acquaintance rented a BR on a 4BR house near a community college. The landlord was 25 yrs old and lived in the same house. The only downside is the demand for these properties may be too high and prices may not be sustainable (too many have the same thoughts). Maybe there may be some foreclosures that may seem attractive due to Covid.

 

[Laradd]

That's a pretty idea for me. It's earning and a little investment at the same time.

 

[xuzoo]

I did this at UCR in 2010. Like during the crash. Paid 90k for a two bed/bath. Renovated for 30k. Sectioned off the bottom lobby to be a third room. Rented two rooms for 550/month for 1100/month. Now the condo is worth 250k and renting it out to a fam 1600/month and having a real estate agent taking care of the place for me.

Doing the same at WestU rn. Bought a 2 bed/2 bath condo for 190k. Renovated for 30k. Renting the other room for 800-850/month. Place is now worth 340k-ish. And I plan to rent it out for maybe 2k/month after I graduate

 

[Molar Whisperer]

I did this at UCR in 2010. Like during the crash. Paid 90k for a two bed/bath. Renovated for 30k. Sectioned off the bottom lobby to be a third room. Rented two rooms for 550/month for 1100/month. Now the condo is worth 250k and renting it out to a fam 1600/month and having a real estate agent taking care of the place for me.

Doing the same at WestU rn. Bought a 2 bed/2 bath condo for 190k. Renovated for 30k. Renting the other room for 800-850/month. Place is now worth 250k-ish. And I plan to rent it out for maybe 1800/month after

It's hard to time the market but looks like you did great. When my kids get older, I'll have them shadow my CPA friend who owns 14 properties. He probably takes home more in a month than I make a year. Hopefully they learn all the tax loopholes and the best business structuring.

 

[Gustavo dos Santos]

How are you qualifying for a mortgage income wise? Are you working and then buying the home before quitting to start school? Do you have a partner who has income? Do banks count student loans as income?

 

[2thDoc11]

How are you qualifying for a mortgage income wise? Are you working and then buying the home before quitting to start school? Do you have a partner who has income? Do banks count student loans as income?

Yea I’ve been working for a while after undergrad and have quite a bit saved. I was going to speak with a mortgage lender but haven’t had the time with work. When it comes to students loans I’m not entirely sure because I haven’t spoken with them.

 

[aubreyjokes]

I worked in renovations/construction for about 10 years before school and I was in a town with a good (gentrification) market - I was able to renovate the house I lived in for three years as well as purchase a side property that I completely gutted and flipped during 3rd year, so that sort of thing is possible (ended up with about $200k profit between the two) BUT as someone mentioned earlier I would strongly caution anyone without experience jumping into that. I've seen it too many times to count - people all gassed up watching HGTV where they show someone swinging a sledge hammer one second then after the commercial break they're picking out tile....its nothing like that in real life.