Katelin - This is a good question. I am assuming that at least part of your motivation is to cut down on your own expenses, and also possibly add a little extra income into your monthly budget. Purchasing a home and then renting to a roommate can accomplish this, but you have to take into consideration several factors. First, buying is not like renting in that you have a house that you cannot take with you when you finish school. You should consider whether or not you would like to retain the property and rent it out once you leave, which might mean you are a long distance landlord. Also, what is the typical market for resell in the area where you are looking to buy? If you do not keep the property, you will need to account for how much you may be able to resell the property once you finish school. I would look at a conservative estimate of 1.5-2% value increase for every year you own the property, assuming you don't have a fixer-upper to begin with. Other considerations would be that you will have to collect rent from someone that lives in the home with you. If they are late, or worse just don't pay, are you prepared to go through the process of evicting the tenant. If I were going into the same situation and was set on buying, I would buy something that I could afford to pay the entire payment, buy in an area where I might consider retaining the property long term, and I would be super picky to whom I agree to rent. If you find a tenant, always pull a credit report and get several references. If you can, also get the parents to co-sign on the lease in case you have to collect back rent. Hope this helps, and study hard!
I super excited to answer this question because I've worked in real estate for years AND I just went through my first experience being a landlord.
So there are two pieces I want to discuss:
Should you buy: I have always been a proponent of buying instead of renting your home. If you can get financing or have the cash to purchase, I think it makes sense to pay monthly towards something you own and have a vested interest in. You also have to do the numbers. Look at how much you'd pay each month for the mortgage and then figure out how much you could get for rent AND make sure you could cover the mortgage in case you don't find a tenant or they flake out on you and leave.
Should you rent your home: you should really think this through. What would the profit be for you and then compare that to the work involved. Landlords must obtain and sometimes demand rent when it's due. Sometimes you get tenants that harm the property or demand a lot of the landlord. My personal story is this: I was a landlord for a year. I had great tenants and they paid on time; however, once the lease was up: I was done! Making $300 a month in profit was not worth it for me to do all the small things involved, but I know many people that say it's a great financial investment and they have done it for years.
Look for a good deal! Good luck :)
I know people that have done this successfully, but here are some things to consider:
1) Some off-campus student housing has suffered recently (even pre-covid) due to new supply from private developers and school-owned
2) Many colleges have also had falling enrollment, which can impact your ability to get tenants
3) Some colleges will be in financial distress from the effects of covid, so make sure you think your school can be a going concern
4) 12 month leases with parental sponsorship is the norm, so make sure to ask for that
5) Student housing generally experiences a lot of wear and tear; professional landlords usually budget at least $350/unit/year for upkeep
I hope that this helps