It is well known that a first-time home purchase may be the biggest investment of your lifetime. And for many, this investment usually doesn’t take place until your early 30s. Most college students probably aren’t thinking about purchasing a home or making any investments… But what if I told you that now is the best time to get started in real estate?
It can be daunting to think about investing in real estate as a college student, especially with the lack of capital that comes with being a student. However, there are tons of ways that you can get started on your investment journey. Getting started doesn’t necessarily mean you have to purchase a property.
For some, that could be simply making a plan for their investment. For others, it could mean actually purchasing a home to rent with a unique strategy. Either way, the best time to start is now. By taking steps now, you will put yourself miles ahead of your peers while setting yourself up for financial freedom.
I dove into the real estate industry headfirst at 18 with zero experience and a full-time college schedule. After being in the industry for two years, I have learned more than I could have ever imagined.
In this article, I will go over the six best ways to get started in real estate as a college student.
1. Educate Yourself in Real Estate
Before you decide to put your money anywhere, it’s highly recommended you educate yourself on what you are getting into. This may seem obvious, but you would be surprised at how often this is overlooked. There is a common misconception that the best way to learn is by “failing forward” as you’re just getting started. Don’t get me wrong, I am a firm believer that experience is the best teacher, especially in real estate, but it is still very important to educate yourself before getting started.
The term “educate” is a broad term, and truthfully can mean a multitude of things, depending on what you wish to accomplish in your career. You do not need to become an expert on anything before getting started, but it is important to understand exactly what you are getting yourself involved in.
a) The Internet
The best ways to educate yourself are by utilizing resources that are readily available to you. Youtube has endless content available for anyone to watch, and is honestly a great place to start. There are also websites tailored specifically for real estate professionals, such as BiggerPockets, that provide excellent resources for individuals of all skill levels.
b) Learn a Purchase and Sale Agreement
You can gain a lot of useful information by learning your state’s basic purchase and sale agreement (In NC, this is called form 2-T, and you can find it here). I found that familiarizing myself with the contract undoubtedly improved my negotiation skills and overall understanding of a real estate transaction. By mastering a basic purchase agreement, you will gain more knowledge than you would expect.
Even if you don’t plan on becoming a real estate agent, this is a great place to start your real estate journey as it covers everything in a typical transaction. You will learn important terminology and elements of a real estate transaction that all seasoned investors are accustomed to. Don’t worry, it’s okay if you aren’t able to comprehend everything immediately, as it gives you a place to start and shows you what you need to learn.
c) Read Quality Real Estate Books
Although we live in the digital age with unlimited access to free resources online, books remain a robust source of knowledge that shouldn’t be overlooked. There are tons of amazing real estate books you can find online. A few that we recommend are Rich Dad Poor Dad, The Millionaire Real Estate Investor, The Book on Investing in Real Estate with No or Low Money Down, and The Book on Estimating Rehab Costs. For more suggestions on good books on getting started in real estate, check out this article by Forbes.
2. Get Your Real Estate License
Getting my real estate license has easily been the best decision I made since I got started in real estate. As a young professional, it is important to understand that people may not consider you very credible to start off. By getting your real estate license, you automatically give yourself credibility. This will enable a sense of trust and security with your clients. Not only will you have legitimacy on paper, you will also become much more knowledgeable with the information you learned to become licensed. Ultimately, this will give you much more confidence in your work!
As I just mentioned, getting your license will teach you a lot of necessary information that isn’t easily attainable otherwise. Most importantly, you will learn the national and state-specific real estate laws that you must follow as a professional. The last thing you want to do is end your career before it even starts by unknowingly doing something illegal.
The Possibilities are Limitless!
Having your real estate license gives you access to a plethora of resources that you would not have otherwise. If you choose to activate your license with a firm, you instantly gain access to a network of experienced professionals and resources, such as the Multiple Listing Service (MLS). The MLS gives you access to every single real estate sale in the area, which can be especially useful to investors when calculating the value of homes to give their offer.
Additionally, your real estate license opens the door for many different income streams. You can now legally represent clients that are looking to buy or sell real estate and earn a commission! As a college student, you may not have the time to be a full, or even a part-time agent, but luckily the opportunities do not end there.
You could activate your license as a referral agent, work as a licensed assistant for another agent, or work with other agents by doing tasks that require a license, such as hosting open-houses and filling out contracts.
3. Find a Mentor/Work With a Real Estate Professional
Another way to get started in real estate and gain experience is by working with a professional in your area. Investors and industry professionals are always looking for help with their businesses. With you being young and ambitious, there is always an opportunity to add value to someone if you are willing to work hard. For example, you could work as an administrative assistant or social media manager for a local real estate agent, a bookkeeper for a developer in your area, or be the boots on the ground for an investor you may know.
You can potentially get paid for this work and will gain valuable experience by establishing these connections and learning from professionals.
4. Build Your Credit
Whether you are looking to purchase a home now or in the future, a strong credit score is a must. The easiest way you can do this is by starting to build your credit as early as possible.
There are tons of different student credit cards you can get that have great benefits for college students. Once you have a credit card, aim to utilize 20-30% of your credit limit, paying it off every two weeks. Your score will quickly increase and continue to do so over time. A strong credit score will give you more favorable loan terms in the future, potentially saving you thousands in interest payments. A credit score of 750 or higher is ideal, but that takes time to build up. As a starter, you should aim to stay above 660 and you will be in good standing.
Once you have a credit card, it’s important to stay on top of your credit score by checking it often. You can get a free credit score check each year from Credit Karma, or you can stay up to date in most mobile banking apps.
5. Network!
a) Reach out to Professionals
One of the easiest ways you can educate yourself is by talking to people who are professionals in the industry. For us at Northstate Equity, this was a huge help. By reaching out to individuals in the real estate space, we were able to receive the extra boost we needed to get started. You would be surprised at how helpful people are when it comes to getting started in real estate. It is easy to find people involved, even if you don’t know anyone personally. I recommend checking out the BiggerPockets forums to find people in your area if you do not know anyone personally.
b) Attend Meetups
Attending local meetups has been one of my favorite things to do since starting Northstate Equity. As you attend meetups with fellow investors, you will surround yourself with people who all share a similar drive and passion for real estate. These are the people you want to talk to and work with. The best part is, they are all at the meetup for the same reason as you: to build relationships. I still keep in touch with people I met at the first meetups I attended, and have benefited greatly. Some great ways to find meetups in your area are by checking Eventbrite, Facebook, and Meetup.com!
6. Buy a Property!
Last, but not least, is to actually purchase a property yourself. While you are in college, one of the most viable ways to do this is to house hack. A house hack is when you purchase a home as your primary residence and rent out other parts of the home. The goal is to cover your mortgage payment with the rent you receive from your roommates, allowing you to practically live for free.
If you want to learn more about house hacking, check out this blog by my partner, Jared Williams.
House hacking while in college is one of the great route to take if you wanted to get started in real estate early. You are almost guaranteed to be living with roommates, so there is always an area for opportunity. When is another time in your life that you will basically be forced to live with roommates? You can get a head start in your investing journey by house hacking a home in college. Some deals will even have the potential to bring you additional cash flow.
You may be concerned that as a college student you won’t be able to qualify for a home purchase without W-2 income; however, there are many ways to circumvent this. You could partner with an investor, use a parent to cosign on a mortgage, raise private money, or obtain a hard-money loan. These are just a few financing routes you can take. If you are curious which route would be best for you, reach out to us here!
Don’t get me wrong, house hacking is not your only option for buying a property in college. It may not be your best option, but we’re here to help either way. There are still many other ways to do so, which you can learn about by contacting us here.
Conclusion
There are many different ways for you to start your real estate journey. Ultimately, it comes down to your current situation and long-term goals. It does not matter what you are doing to get started, as long as you are taking action.
