18 year old looking to buy and apartment building.
Hello, my name is Cam, I am 18 years old and graduating high school this year. I am going to university but can not afford to live on campus. The rest of my college is paid for excluding room and board. I have been evaluating my options of renting an apartment as it would be cheaper than living on campus, but then I had the idea of investing in my own building. Would it be a good idea for me to take out a loan and buy a smaller (4-unit) apartment building that I would live in and rent out?
Hi Cam: First of all, that is so impressive that you’re already thinking about being a real estate investor! I bought my first investment property at 21 and have learned a lot along the way. I would talk to your bank or credit union about getting pre-approved for a loan first. I think buying an investment property where you can live in one unit and rent out the others is a great way to get started. Being in college, you will also have access to other students and young professionals who need housing. Adding coin-operated laundry machines, charging for parking and even charging for window A/C units or upgraded appliances are all ways to make some additional monthly income from your multifamily property. After you find out how much you’re pre-approved for, work with a realtor and find a property in your price range. Remember to check that it’s legally zoned for its current use, 3 or 4 units etc and get a property inspection and appraisal done. Also, budget for utilities, your mortgage, taxes, and insurance. Here’s an article on multifamily loans and one on tips for new landlords. I hope you find them helpful and please stay in touch and let us know how everything works out.
All the best,