Help needed. What would you do if you were me?

[ohsofrugal]

Hello everybody,
After dropping out several years ago, I have decided to go back to university and complete my degree. I believe post-secondary education is an investment in myself and certainly a necessity to do better (income and personal development wise).

I`m currently debating whether or not I should buy a property this summer before going back to school. My reasons are simple. I have the ability now to qualify for a modest mortgage (about 180k) and won`t be in a position to do so until after I`m done school and secured a good job (app. 2.5-3 years from now). I`m thinking about an owner-occupied house with basement suite where I could live in smaller unit and rent out the larger one in GTA. This or perhaps get a family member to put 20-25% down and just get an outright rental property outside of GTA. I prefer the former because I don`t want to live with my parents forever...

I will have a little under 30k by June 09. This can help with a downpayment but mostly to pay for school. The way I see it, time is money and those years are a lot of time to not take any action. Should I try to get involved in real estate now or wait till I`m done school. I`m 24 years old if it matters. Thanks..

Please note: I`m aware you can invest in real estate via joint ventures, opm and resources etc and I will also pursue those avenues. This is more about seeking advice on the fact that I am able to qualify for a mortgage and whether I should take advantage or not. What would you do if you were me?

 

[Lucas]

QUOTE (ohsofrugal @ Nov 30 2008, 10:26 PM) Hello everybody,
After dropping out several years ago, I have decided to go back to university and complete my degree. I believe post-secondary education is an investment in myself and certainly a necessity to do better (income and personal development wise).

I`m currently debating whether or not I should buy a property this summer before going back to school. My reasons are simple. I have the ability now to qualify for a modest mortgage (about 180k) and won`t be in a position to do so until after I`m done school and secured a good job (app. 2.5-3 years from now). I`m thinking about an owner-occupied house with basement suite where I could live in smaller unit and rent out the larger one in GTA. This or perhaps get a family member to put 20-25% down and just get an outright rental property outside of GTA. I prefer the former because I don`t want to live with my parents forever...

I will have a little under 30k by June 09. This can help with a downpayment but mostly to pay for school. The way I see it, time is money and those years are a lot of time to not take any action. Should I try to get involved in real estate now or wait till I`m done school. I`m 24 years old if it matters. Thanks..

Please note: I`m aware you can invest in real estate via joint ventures, opm and resources etc and I will also pursue those avenues. This is more about seeking advice on the fact that I am able to qualify for a mortgage and whether I should take advantage or not. What would you do if you were me?


Hi ohsofrugal,

If it was me, I would absolutely purchase a property w/ suite while in University. However, I would be sure that the property I chose fit the investment criteria we are fortunate enough to have access to...

Good Luck!!

Lucas

 

[GarthChapman]

One of the most successful (and frugal) men I know started his investment career by purchasing a home in Vancouver while in Universtiy. He rented rooms to fellow students. He hit a home run and has never looked back.

Do it however it works best for you. Define your criteria, do your due diligence, and take the plunge. And make the purchase soley on its financial merits - you won`t live there forever.

 

[Karma]

Something to consider:

You may want to check into the Lifelong Learning plan where you can access RRSP funds as a loan to yourself to pay to return to school. It may also be worth it to put your money through this and then withdraw it and you can pay it back over time- the tax benefits would be worth it and you can later access this money to buy a rental property- you may be able to do both- you`d just have to check the time limitations for each between deposit and withdrawal but you can still sneak it into this tax year.

S.G.

 

[TommyK]

QUOTE (ohsofrugal @ Nov 30 2008, 09:26 PM) Hello everybody,After dropping out several years ago, I have decided to go back to university and complete my degree. I believe post-secondary education is an investment in myself and certainly a necessity to do better (income and personal development wise).
I`m currently debating whether or not I should buy a property this summer before going back to school. My reasons are simple. I have the ability now to qualify for a modest mortgage (about 180k) and won`t be in a position to do so until after I`m done school and secured a good job (app. 2.5-3 years from now). I`m thinking about an owner-occupied house with basement suite where I could live in smaller unit and rent out the larger one in GTA. This or perhaps get a family member to put 20-25% down and just get an outright rental property outside of GTA. I prefer the former because I don`t want to live with my parents forever...

I will have a little under 30k by June 09. This can help with a downpayment but mostly to pay for school. The way I see it, time is money and those years are a lot of time to not take any action. Should I try to get involved in real estate now or wait till I`m done school. I`m 24 years old if it matters. Thanks..

Please note: I`m aware you can invest in real estate via joint ventures, opm and resources etc and I will also pursue those avenues. This is more about seeking advice on the fact that I am able to qualify for a mortgage and whether I should take advantage or not. What would you do if you were me?

If you have some down payment you should definitely prepare yourself for a purchase (doesn`t mean you HAVE TO buy). Since you are purchasing for your own residence, you can get "pre-approved" and potentially be approved for much lower down payment so you save some for your education. The banks usually qualify you for a period of time (say 3 month? you can verify with a broker or banker). So get pre-approved while you can. Banks are your GREATEST investment partner. You need their money so you can run your real estate business. You will lose this opportunity after you go back to school.

Steps to Consider
1) get pre-approved soon (so you don`t miss the opportunity)
2) be the real estate expert of the area you want to reside
3) property class selection (older bungalows with basement? apartment with 2-bedrooms? townhouses with 3 doors?)
4) study the market on mls, get some idea before approaching a realtor
5) do your due diligence based on ACRES (think of yourself as a RENTER when you purchase) This place is probably not going to be your dream home.
*if the numbers don`t work, then don`t buy it (but at least you have a chance after you get pre-approved)

The truth is if you don`t buy now, you will end up paying rent or be a roomate with someone else anyway. Why make someone else rich when you can be the one?

Good luck!

Tommy