By Damon Cameron Jr
You just graduated high school! Congratulations! Now you are debating if college is for you or if you should jump into real estate investing on a full-time basis. Many young high school graduates debate whether college is worth it or if real estate investing after high school is the best option. This article will discuss the advantages and disadvantages of attending college and the other option of jumping straight into real estate investing.
Opportunity to Build Clarity for the Future
College is an excellent opportunity to figure out what you want in life. College is full of people from around the world with different ideas for their life which can be inspiring for young entrepreneurs. And there is much to learn in the courses you will take.
Ability to Find a Career
College can benefit future real estate investors looking for a temporary career to get a W2 job post-graduation. A 9-5 job will make applying for a home loan much easier for real estate investors looking to build a portfolio of cash-flowing assets.
The hundreds of students who cross your path over four years will mold you into a new person. Some will inspire you. Your friends, acquaintances, and classmates will become your future network for business and job opportunities. In addition, college allows you to explore various interests through numerous clubs, activities, and groups. These offer the opportunity for a broad range of life-changing new experiences you might only have while attending college.
Student Loan Debt
The average student loan debt for a bachelor’s degree is $30,000. Student loan debt would classify as “bad debt” because it takes money out of your pocket every month. Banks and lenders will consider your student loan debt when approving your home loan application.
The life of a college student is like high school. The average college student takes 15 credits per semester. The course work that comes with being a college student can be daunting for some students and interfere with the opportunity to work a part-time job.
Being a full-time student means you will not have time to do other things that can help you reach your long-term goals. Instead of self-educating on the topics and strategies you really want to learn about, you may be sitting in a classroom for a course you don’t care about but must take. The time and money spent to attend college full-time could be applied in other areas of your life so that you would be closer to your goals after those four years.
Real Estate Advantages
Multiple Streams of Income
Real estate investing can produce a double-digit return on investment through multiple streams of income. And starting these investments as soon as possible (right after graduating from high school) allows for more returns. Four wealth benefits in real estate will be working for you as soon as you begin:
- Cash Flow: Rental income minus expenses
- Appreciation: An increase in value of a property
- Principal Paydown: Reduction in debt owed through tenant rental income
- Tax Benefits: Reduction of income that can be taxed
No Student Loan Debt
High school students who do not attend college eliminate student loan debt. Student loan debt hurts your debt-to-income ratio when applying for home loans. Student loan debt can also decrease the amount of money you can save every month for your next rental property.
More Time to Figure Out What You Want to Do
Many high school graduates don’t know what career they want to pursue. If that is you, then paying tens of thousands of dollars for a degree that you may not even want to use is a waste of money. By taking a year or two to explore real estate after high school, you are also allowing yourself more time to figure out your desired career path.
Real Estate Disadvantages
The biggest challenge for high school students interested in jumping into real estate is bank financing. The average recent high school graduate does not make enough money to qualify for a home loan. This will require you to find a cosigner for your loan or use another creative way to finance your real estate purchases.
Lack of Experience
The average high school student does not have any experience investing in real estate. Most young people get stuck in analysis paralysis before purchasing their first property. Analysis paralysis is when you overthink or over-analyze a situation causing decision making to be “paralyzed.”
Carefully consider all the advantages and disadvantages of both options as you plan your future. There is no right or wrong answer, and in the end, it will be your decision. Whatever you decide, we wish you the best of luck!