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 PDU
travel kid vs.amerika
Registered: 12/04/02
Posts: 9,605
Loc: beautiful BC
Last seen: 9 hours, 3 minutes
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 Pay for university, or buy an investment property? 
#16606007 - 07/28/12 02:50 PM (10 months, 16 days ago) |
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Please bare with me, I am a newb to finance, and a bit of a dreamer. If I come off as irrational, I probably am. I am seeking more experienced opinions on my situation;
I will have $20,000 in savings in the next year, and am not sure how to best use the funds to my advantage for the future.
The options are -
A) Pay for school rather than taking loans.
B) Purchase rental property, and let it pay for itself.
C) Purchase property and live in it while going to school, perhaps having roommates to pay the mortgage.
Option "A" staying out of school debt is the obvious option.
I should point out that i have approx. $20,000 in an education trust fund, which i can use towards tuition. I am willing to work part time through university, and can probably make some decent money over the summers fire fighting or treeplanting. In other words, i will likely keep student loans to a minimum.
Option "B" is reasonable and i can see no downside to it, besides having to keep an emergency fund available, and being able to allocate time to fix things as necessary. It would be a partnership with my step father and we would be able to share in these responsibilities. It would be a good learning process for me, and a way to build equity.
Option "C" is probably the best option - I have had 2 friends successfully do this. By having roommates they live nearly rent free, while buying a house, building equity and going to school.
Proposed time line:
It's July 2012 now. I am going to go to Australia/SE Asia May 2013 for 1 year and then return to go to school in Sept 2014.
It seems ideal to buy a house in early Spring 2013, rent it out for 1 year while I travel (having my step father available to do the maintenance during this time.) and then moving in when i return...
Obviously there is more to it than this...
Do you think this is realistic? Would it be better to invest in property or avoid all student debt?
Please comment.
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GO OUTSIDE.
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jammin
Karma Farmer
Registered: 03/30/11
Posts: 2,546
Loc: Missourah
Last seen: 7 hours, 47 minutes
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Re: Pay for university, or buy an investment property? [Re: PDU]
#16606055 - 07/28/12 02:57 PM (10 months, 16 days ago) |
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I'm gonna go with "option C" 
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"Bassnectar is god, and I am Jesus"
-Bassfreak
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mr.niceguy
Newb on a Mission
Registered: 07/25/12
Posts: 108
Loc: Da Dirty South
Last seen: 5 months, 18 days
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Re: Pay for university, or buy an investment property? [Re: PDU]
#16606084 - 07/28/12 03:02 PM (10 months, 16 days ago) |
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I know guys in their late30s who are still payin off college debt. Debt is a bitch. My friend's parents bought a nice but outdated house for cheap & we've been fixing it up all summer. Rent is $170/month & I get to live in a beautiful house right down the street from the univ. w/ 3 of my best friends
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 "IN THIS BRIGHT FUTURE, YOU CAN'T FORGET YOUR PAST"
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 ZippoZ
Knomadic
Registered: 06/17/03
Posts: 12,635
Loc: Pongyang, North Korea
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Re: Pay for university, or buy an investment property? [Re: jammin]
#16606103 - 07/28/12 03:06 PM (10 months, 16 days ago) |
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right now there is more student debt out there than there is mortgage debt.
now, if you ask me, the writing is on the wall in that regard. We have flooded the market with entirely too many well educated people for our current economy. There just aren't that many jobs out there, and thats transforming us as a nation into a place where only overqualified people are getting the jobs, and they're getting underpaid.
So. For that reason, I would not recommend going to college as your sole option. However, if you can find that right synergetic situation where you can go to school, and also be actively investing in some real property... thats not a bad idea.
Not only will you get to have the college experience, but through owning a property, you're really going to get a working knowledge of home repair, ownership, and landlord tenant issues. I can tell you that when I remodeled my first house, it taught me a LOT. Actually, it taught me enough to the point where I could actually go out, and sell my services as a handyman or contractor to other people. And thats an education that you can put to work .
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PEACE
zippoz
"in times of widespread chaos and cofusion, it has ben the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m anagment, too much programming and controll, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"
"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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Anonymous
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Re: Pay for university, or buy an investment property? [Re: ZippoZ]
#16606233 - 07/28/12 03:30 PM (10 months, 16 days ago) |
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I would pick option B if I were in your shoes. Yea college is fantastic, but if you can find an option to sidestep all together and just get cash I would sidestep it.
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PDU
travel kid vs.amerika
Registered: 12/04/02
Posts: 9,605
Loc: beautiful BC
Last seen: 9 hours, 3 minutes
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Re: Pay for university, or buy an investment property? [Re: ZippoZ]
#16606748 - 07/28/12 05:04 PM (10 months, 16 days ago) |
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Quote:
ZippoZ said:
Not only will you get to have the college experience, but through owning a property, you're really going to get a working knowledge of home repair, ownership, and landlord tenant issues. I can tell you that when I remodeled my first house, it taught me a LOT. Actually, it taught me enough to the point where I could actually go out, and sell my services as a handyman or contractor to other people. And thats an education that you can put to work .
Through my current job i am quite proficient with all manner of minor renovations, and very much look forward to updating the house myself.
I am very interested to learn and gain experience in the ownership and landlord/tenet areas though, like you say.
Despite the nay sayers of a college education - i can't put it off anymore. I deep down crave the experience of a college education. I think i can mostly fund it with my trust fund and working during the summers thus staying relatively debt free. I am confident that between my life experience, job experience, and education i will be able to make a decent living regardless if a degree gets me a career or not. That said, by that time i would hope to have $70,000 or so of equity built up in my home by then... Giving me a foot up, regardless.
This is almost all i can think about - i am stuck working a job i kind-of hate, just trying to build up this "nest egg," i sure hope it pays off in the end....
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GO OUTSIDE.
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ZippoZ
Knomadic
Registered: 06/17/03
Posts: 12,635
Loc: Pongyang, North Korea
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Re: Pay for university, or buy an investment property? [Re: PDU]
#16606896 - 07/28/12 05:30 PM (10 months, 16 days ago) |
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Quote:
PDU said: p
This is almost all i can think about - i am stuck working a job i kind-of hate, just trying to build up this "nest egg," i sure hope itays off in the end....
one thing ive learned, by getting myself burried in projects and properties that essentially dictate my life to a very extensive degree is this....
Its great to hope your gambles pay off in the end. But make damn well sure you can enjoy your life and what you do on your journey there. Otherwise, its all for nothing.
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PEACE
zippoz
"in times of widespread chaos and cofusion, it has ben the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m anagment, too much programming and controll, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"
"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."
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iateshaggy
i haxor 360s
Registered: 05/20/05
Posts: 4,295
Loc: 612 Warf Avenue, next to....
Last seen: 1 hour, 10 minutes
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Re: Pay for university, or buy an investment property? [Re: ZippoZ]
#16607626 - 07/28/12 08:52 PM (10 months, 15 days ago) |
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my advise isn't really tailored to your situation but rather to anyone about to start college. a university will sell any kind degree to you that you want, the job market on the other hand, only buys a small handful of them at any kind of premium price. basically, if you aren't studying for medical, engineering or some other degree only field, if the degree isn't free, they don't tend to be worth it.
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You are a filipina sex goddess who wants to fuck me until I fall asleep, so then you can tickle my balls and see if the legend of my diamond filled nutsuck is true. I am a white man from costa rica, who smells like lime jello.
I can flash/jtag/repair 360's, pm for details.
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pothead_bob
Resident Pothead
Registered: 04/12/08
Posts: 1,797
Loc: Your computer screen
Last seen: 4 months, 11 days
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Re: Pay for university, or buy an investment property? [Re: PDU]
#16683460 - 08/11/12 08:18 PM (10 months, 1 day ago) |
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If you do end up going to college, I'd consider looking for subsidized loans. I know the appeal of wanting to stay debt free but it's a better idea, IMO, to take 0% APR loans if you can get them and then use the capital you have to invest and make 5-6% on it. Otherwise, you'd be using that money on your college education and delaying the return you can get on it for 4 years or however long it takes you to finish school. On $20,000, 5-6% is not an insignificant number. Especially if you compound it over decades after school.
The subsidized loans I have accrue no interest until I graduate, so I just throw all my extra cash into my IRA and get returns on that money. I'll worry about paying the loans back when I get out of school.
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No knowledge can be certain, if it is not based
upon mathematics or upon some other knowledge
which is itself based upon the mathematical
sciences. -Leonardo da Vinci (1425-1519)
Speak well of your enemies. After all, you made them.
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