Rental vs. student loan

**GoodSteward** · 04-27-2018, 07:42 AM

Typical advice is to pay off that kind of debt before getting into rentals. Rentals are very stressful and the success varies greatly. Some do well, some do terrible, some just break even. Considering the only way out of student loan debt is to pay it or die, I personally would rather get rid of it to do whatever I wanted later and not have to keep factoring that in.

What would be your plan for the student loan if you bought the rental instead?
What is the rate on the student loan, and how much is the balance?
How fast did you save for this possible purchase, and how fast could you acumulate this much again?

**GoodSteward** · 04-27-2018, 08:03 AM

Here's an idea if you are stuck on buying the rental, but also want some safeguard to it failing later.

Finance the rental and let the payment cover the mortgage, then pay off the student debt with cash. That way, if things go south(can't rent it, you lose your job, or you just get tired of being a landlord, etc.), you can sell the house and be done(and still have no student loan debt). Also, in an extreme situation, it could be included in a bankruptcy. If you kept the student loans and things went bad, you would be stuck with the loans(even in bankruptcy), AND out the money and rental.

I still think being out of the debt would be best, but if you are set on buying a rental you will do that. I would rather see that student loan out of the picture, even if the debt is still there.

**Longhorn60** · 04-27-2018, 08:36 AM

i think you bring up some good points and i appreciate it. the rental may not be worth the investment. the student loan is $350/month. if i buy a rental (rural texas), im looking at charging 800-1000/month. once property taxes and insurances are paid the bring home may be as little as 500/ month. thats a total net profit of $150. and thats not including any repairs that occur on the property.

**Gailete** · 04-27-2018, 08:57 AM

It is easy to think that you can make good money with rental properties, but if you don't have the skills needed to keep up a place, or it isn't nice enough to bring in folks that have the money to easily pay the rent, you can run into problems. It doesn't matter how much you check into a potential renter, the minute they move in, you start having problems. And then you have deal with them face to face.

**Jluke** · 04-27-2018, 09:34 AM

read the real estate investing subforum on here. good info there.

another vote to payoff the student loans...

alternatively, it doesn't have to be all or none. I have no interest in a rental property but if you really do and know what you are getting into... consider paying some towards the student loan and some towards the rental property downpayment (then you would have a 2nd mortgage to pay and student loan payment)... yikes?

Rental vs. student loan