Is it stupid to buy a home now?

I am in college and have no money to put down. But I'm tired of throwing away money on rent. I'm thinking I can buy a small modest home, but I would need to rent a room to afford it. Is this as absurd as I think it is, or could this potentially be a good investment?

One thing which may swing in your favor is that while nationally the housing market is in trouble, rental properties in college towns are doing very well.

Provided that you have the ability to either document your income or find a cosigner capable of doing the same, government (FHA) and Fannie Mae (MyCommunity) loan programs will help you qualify with no money down.

When buying in college towns, it is most important to determine whether or not you will be able to purchase a property as close to campus as possible. The rents which you can get on or immediately off campus are more consistent and grow in line with the annual increases in tuition an dormitory costs.

If you analyze the number of people who live off campus vs. the number of people who live on campus at your college, an determine the availability and average rent they are paying off campus, you can easily determine whether or not the investment will be workable for you.

Find a two unit property with two 1 bedroom apartments or a two family house and you can legally use the prospective rental income to help you qualify for the loan while you live there and when you graduate you can probably still turn a profit renting it out to students. Also remember that students tend to live in apartments like they live in dorms, two to a bedroom, and they compare the cost of living in a nice apartment with the price the would pay in th dorms, not necessarily the broader rental market, which can seriously juice up your rental income.

The further you get from campus, the less this dorm comparison will apply. If you can afford the mortgage payment and can line up the tenants, go for it. If you can't, make oyur folks or another interested and able party a business proposition (If you can make the numbers work of course). Silliest thing I did in college was not buy an apartment I was ready to pull the trigger on because I picked up a scholarship that covered room and board. That apartment recently sold for over 5X what I could have purchased it for 10 years ago. If there's demand for off campus housing very near your school, give it a shot.

Good Luck!

You can buy a small apartment I suppose.

its absolutely not stupid, its actually a great time! alot of inventory, prices reducing: a buyer can have a great amoung of leverage in negotiations but you do have to have money these days. Lending standards are tighter than last year.

Could be. If you are a "handy-person" type, that would even help. This is a pretty good time. Wait until after the summer, and then start looking at the homes that didn't sell. They will be a little more concerned if they are ever going to sell. You MIGHT be able to snag one for a very good price. Make sure you have your credit in order, and look to get preapproved for a loan in late July to early August

Its not absurd at all. Right now the real estate market is in a slump, so prices are low. Its a much better idea than wasting money on rent, since renting out a room would help pay for it, and later on you could sell it for profit.

It's a good time to buy a place if you have a steady income and your annual salary is at least 1/3 the purchase price of the home and you don't have debt (you are so young you should use the extra money to pay off your debt first).

One thing to consider is you are very young and you need to be sure you will be around for another 5 or 10 years if you are going to buy a house. You don't want to house skip because it is a lot of money out of pocket every time you do it.

Well, it depends on how much you need to borrow. If you have no money to put down, it's unlikely that you will be able to buy a home anywhere, especially if you are a college student with no income. If you do have an income, you should check with your local lenders to see if you qualify. Nobody can predict if the property will be a "good investment," any more than anyone can predict whether Microsoft or GM will be a good investment, or whether interest rates or corn prices will go up or down. If you can do that, you can become a billionaire with no work at all.

This is a good time to buy a home - for it is a Buyer's market. You can probably negotiate a very good deal on a home whereas you couldn't really do much negotiating even 5 years ago.

However - you are going to need at minimum 10% down payment.

It would be a good investment if you can arrange the purchase, for it will grow in value over the time you are in college, and once out and you move on in your career, you can sell it at a profit, and have a bigger down payment for another nicer home, or you can hire a property management company to rent it to other college students and have an income coming in off it.

Just be sure you are fully aware of all the responsibilities of owning your own home. Property taxes, maintenance, etc. No landlord to call to fix things - you are it.

It all depends on what you are trying to accomplish. I would say that if you can swing it financially, go for it. Being a home owner is way better than renting, because finally your monthly payment is going in to your own pocket instead of someone else's. Right now in most US real estate markets (not all of them, so find out more about your local market before going too far), it is a fantastic time to buy. If it is something which interests you to do, look in to it further.

It's not absurd at all! It's savy thinking. When you pay rent, you are buying a house for someone else. Do you want to buy a house for yourself or someone else? Getting a mortgage and everything (there's lots of everything) might be tricky if you have no money down, but it can be done. I own three houses outright, no mortgage, just the taxes, outright because of renters. Real Estate is a business that you can do no wrong in. Just think of it this way, every mortgage payment you make is money in the bank. But, you have to be able to make that payment no matter what the renters or room mates do. Are you prepared for that?

There are programs that can get you into a house with no money down, even some grants that you don't have to payback as long as you don't sell the home for at least 5 years. It would be a good investment, because you can make a profit on the home when you are ready to sell instead of building your landlords retirement. However, being in college what type of income do you have. A bank will look at your income and debts and make sure since you will be getting the loan that you, yourself are capable of paying all of the mortgage payment. They don't care if you have a roommate because they can come and go, but that mortgage payment is always due.

I wish I had the forsight you have when I was your age. I don't know where you are, but buying a home is never a bad investment. I do suggest though that if you are a broke college student, try to get some friends involved. Maybe you and some friends can try to purchase a fixer upper together, live in it, fix it up (sweat equity) and when you all graduate, sell it and make that money. Good luck to you and just so you know, it's never really a bad time to buy a home.

Owning a home has lots of things to consider. Maintenance is expensive. If an appliance breaks, you pay for it, not your landlord. New roof? etc...

I wouldn't call it stupid, but it's probably not a great idea.

You're young, presumably. Do you really want to tie yourself into one home for the next few years? I wouldn't tell anyone to buy a home right now unless they planned on staying in it for at least 5 years.

Plus, what happens if your roommate doesn't pay? Or moves out?

Renting isn't always a bad thing. It's often cheaper, less risk, and easier to change if need be. You've got decades to invest in a home. Doesn't need to be today. Get out of school, get a stable job, build up some savings, then look at buying.