There are many different asset classes you may want to invest in while you're going to school -- including real estate. Adding real estate to your portfolio can result in more diversification than just investing in the stock market, and it can also be a hedge against inflation.
But is it possible to actually purchase real estate while you're still in school?
For most students interested in real estate investing, the biggest challenge could come from the high cost of purchasing properties. Even fixer-uppers tend to cost tens of thousands of dollars, if not more. While you're still attending classes and not working full time, chances are good you won't have the money for a down payment needed to qualify for a loan to buy a property. And paying cash for a property would likely be an impossibility.
While it's sometimes possible to purchase real estate with no money down, lenders may not be willing to work with you while you're in school when you have limited income and little professional experience. Financing 100% of the purchase price of an investment property could also be a high-risk approach if you don't have a lot of income to cover the carrying costs until your investment starts paying off for you.
The good news is, it is entirely possible to invest in real estate without ever owning a property -- and often, that's the best way for students to get some exposure to this asset class.
There is a large number of different options to put money into real estate without directly purchasing property. Here are two examples:
Each of these different kinds of investments has its own advantages and disadvantages. Also, some funds and non-publicly traded REITs have minimum investment requirements. But, in general, it is possible to find options that require very little money to get started. In fact, with some brokers allowing you to purchase fractional shares of ETFs, it may be possible to get started investing in real estate with just a few dollars.
This can be great for students who don't have a fortune to spend but who feel like the real estate sector is the place they want to put some of their cash. If you're a student, consider researching these options to decide if any make sense for you. Like with any other investment, though, be sure to carefully consider the risks as well as the potential upside and take the time to think about how real estate fits into your overall quest to build a diversified portfolio.
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