Zoey Dow, Home Buyer in San Luis Obispo, CA

As an incoming college student, is it a better investment to buy a cheap property or rent a studio apartment?

Asked by Zoey Dow, San Luis Obispo, CA Sun Feb 10, 2013

Help the community by answering this question:


It depends on how much money you have to put into purchasing an investment property and if you can qualify.

I have several options that you could take advantage of if you were interested in purchasing an investment property to live in while you attend school.

Depending on the property you may be able to use rental income from the property to help you qualify. Or if you have a co-borrower who could help then you may be able to find something to purchase and use it as a primary residence.

Please feel free to contact me with any questions or concerns, or you can find more information here at http://www.slohomesandrealty.com.
0 votes Thank Flag Link Wed Jul 3, 2013

Congratulations! I graduated from Cal Poly. I have lived in San Luis Obispo County for 24 years and been a real estate agent since 1998 - so I am very familiar with the area and market.

So first off when you rent you are paying someone else’s mortgage. When you buy you are paying yours. But deciding what to do may be contingent upon what you qualify for and the payment you are comfortable with. My suggestion is calling a lender first and see what you qualify for. I can supply you with some local lender's phone numbers if you need. From there they will tell you what price range you are qualified for and what your payments will be. Then I can give you a list of properties in that price range and you can determine if you are satisfied with those or get a better deal renting. With interest rates and prices at an all-time low if you can get into a home and take the deduction from owning your own home on your taxes that would probably be the best decision. But that is up to you to decide. I would be happy to talk to you about this - you can email or call me anytime.

Kelly Sans, Realtor®
Century 21 Hometown Realty
1160 Price Street
Pismo Beach, CA 93449
Cell: 805.748.9402
Ofc: 805.773.2100
Fax: 805.773.2435
0 votes Thank Flag Link Fri Feb 15, 2013
It depends on how much down payment you have, and if you can qualify for a loan. If money and borrowing $ is not an issue, I would suggest not buying a “cheap” property unless it is cheap because it needs a lot of work. It is always better to buy a home in any condition based on the location.

Also, if you can afford a two to five bedroom home, it might be a good investment because you can rent out the other room(s) while you are in college and I your room in the home may end up being free or significantly less than what it would cost to rent or buy a smaller home/condo.

Lastly, keep in mind that SLO city tends to be more expensive compared to other areas in the county. So, it may not be unaffordable to buy close to the campus and if being close to the campus is important you and you may be better off renting.

You can look at all of the homes in SLO on my web site at http://www.dnorwood.com/SLO.aspx - Please give me a call if you decide to buy a home –

David Norwood- Central Coast Real Estate / 805-471-0828 David@DNorwood.com
Web Reference: http://DNorwood.com
0 votes Thank Flag Link Sun Feb 10, 2013
Property in a college town is always a premium and good invest,net.
If you have the resources and the dollars make sense, it is a great idea.
0 votes Thank Flag Link Sun Feb 10, 2013
I have a different response from some of my colleagues. Even though I'm a Realtor, I don't think that buying is always appropriate.

"Cheap property' is a concerning term to me...because you typically get what you pay for. Real estate is all about location...typically 'cheap' properties are in a less than desirable location.

Next - I caution many of my buyers to buy for NO LESS than 5 years. We've all seen the shattering effects of a real estate market that went bust after the peak. Many millions of folks lost money in their real estate investments. The longer you hang onto the property, the better your chances of making money on it.

Last, owning a property requires a greater commitment of time and money than renting. You're a young college student...do you really have the time to maintain a property, take care of things when they break, etc?

Whether you buy or rent is ultimately your decision. I am just pointing out a few concerns I would have...I encourage you to speak with a mortgage broker, and carefully evaluate your finances and the numbers involved.

Best of luck.
0 votes Thank Flag Link Sun Feb 10, 2013
Asking a bunch of real estate agents if you should buy is like chumming for sharks. Most of the answers are preordained. That said, buying at a time of historically low interest rates and near the bottom of the price curve may very well work out for you depending an several factors.

There are a number of rent vs buy calculators online. You should also be able to load a free app for your phone. Or, I would be happy to suggest a couple and/or work with you to help make that determination.

The most common model locally would be parents buying a multi-bedroom house for their student, renting out the rooms to other students to cover mortgage, insurance, upkeep and such, then selling at a profit after graduation to help offset school expenses. Historically that has been a very good plan, though for those Poly parents who bought in 2006 or 2007, not so great.

Another option that I like a lot but is underutilized is a special loan program that allows the student and the parents to buy a home together. The benefit to the parents is this is an owner-occupied loan resulting in lower interest and better terms. For the student, they are getting a start in the real estate market at an early age and building on their credit history.

What's best for you and/or your folks or other relatives whose help might be necessary is highly personal and dependent upon your unique circumstances. If I can help you to sort this out, please don't hesitate to call, text or email. By the way, I'm an exclusive buyers broker meaning I only represent buyers; never sellers.
0 votes Thank Flag Link Sun Feb 10, 2013
If you buy something, you can use it during your student years and then rent it out or sell it , if you rent you will only have rent receipts which would you prefer?
0 votes Thank Flag Link Sun Feb 10, 2013
Your question is confusing. Renting anything is an expense, not an investment. So, there's no way to compare it to any other investment.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Sun Feb 10, 2013
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