The Young Money Club

Investing in real estate for college students can be a little daunting. But many people view real estate as one of the best investments a person can make. It offers multiple avenues to generate a return and the demand for a nice place to live is always growing. As a college student looking to invest, you may feel like real estate is out of reach. After all, even a “cheap” house in most of the US can cost well over $100,000.

I’m here to show you that real estate might be more accessible than you previously thought. There are many avenues to invest in real estate each with a different level of financial and time investment. The following is a list of ideas that span the entire spectrum, from those that require no money and a large time commitment, to those that require more money and less time.

REIT

REITs or Real Estate Investment Trusts, are basically large funds, similar to mutual funds, that instead of offering a portfolio of stocks to investors, offers a portfolio of real estate.

There are tons of different REITs that allow you to choose the type of properties you want to invest in. Whether you want to invest in casinos, apartments, or a good mix of property types, there are REITs that specialize in basically every type of property.

There are 3 primary benefits to a REIT:

1.) By law, a REIT must pay out 90% of it’s earnings to shareholders as dividends

2.) REITs allow you to diversify your investment through a portfolio of multiple properties

3.) Allows you to invest in real estate without having to do the legwork or have a lot of cash on hand

P2P Lending

Similar to REITs, in that they don’t require as large of an investment, P2P lending services allow you to invest in individual real estate deals. The advantage of this over a REIT is the additional customization that it allows you.

With peer-to-peer lending you could create a portfolio of the specific properties you want to invest in and have complete control over where your money goes.

If you’re interested in P2P lending the sites Lending Tree

Rent Out Your Own Space

If you live in an apartment or a house with an extra bedroom, unused storage, or maybe an empty garage, you can rent that space other people. Think of yourself as a junior landlord, collecting rents, managing “tenants”, and practicing your people skills.

Renting out an extra bedroom is probably best managed if you direct your attention towards friends or family. Preferably someone you wouldn’t mind sharing your space with. Storage space is a little easier to manage because you won’t have to interact with the renter everyday. Just be sure to take good care of their stuff so you don’t end up being accused of stealing or destroying their property.

Non-traditional Paths

While there are hundreds of different ways to invest your time and money in real estate, most people tend to focus on the few they see on HGTV. Investing isn’t just crunching numbers and moving money around, it’s a creative endeavor that rewards those who think outside the box.

If you don’t really have any money at all, investing your time is the only other option. The way to do this is to act as a middle man between different parties within real estate. One way, which is more complex than it seems, is to do what’s called wholesaling. This is the process of getting a house under contract without the intent to buy it, then selling that contract to another buyer for more. The difference between the two is your profit. You can find more detailed information on wholesaling here.

The other option for those with no money, is to manage properties. This is hard to really call an “investment” because it could very easily become a job/business, how far you want to take it is up to you. You could start a property management business, collecting rents, dealing with tenants, repairs, etc. which removes the burden from the property owners. You just collect a percentage of rents for your efforts.

A newer version of this model is the management of vacation rentals. This is useful for people who own vacation houses but don’t use them year-round. You can approach the owners and offer to list/manage their vacation houses for a fee. You would manage the booking dates, housekeeping, and any issues that might arise during a customer’s stay. This may not work well everywhere, but if you live in a popular vacation destination it’s a great option that won’t cost you a dime.

Go Big

If you’ve got the money or access to someone who does, then by all means go big. You can do the “REAL” real estate investing and work to buy, sell, rent, or flip properties.

Each type of investment strategy has it’s own set of pros and cons and may require varying levels of financial investment. For example, to flip houses you’d need the money to actually purchase a house outright as well as whatever amount you plan to use on renovations. Whereas if you were to buy rental properties, you might only need a small down payment.

If you want to learn more about real estate investing I highly recommend checking out Bigger Pockets. It’s a great resource for new and experienced investors alike. Whether you just want to network with other investors or start learning the basics, there’s information for you.

If you’re a beginner and are looking for a good starting point, check out the beginners guide here.

If you would like to learn about other ways to invest you can check out my post on How to Invest Your First $1,000.