Your guide to housing

by Caleb Fort

Daily Lobo

Students who rent are throwing away money, said Travis Thom, owner of Venture Realty Group.

"If you buy property instead of renting, you're making money while you're in school," he said. "You plant a money tree, and after four years, you've made money just by having a house."

Students can take out a mortgage, buy a house and rent out extra rooms to friends, he said.

The monthly payments on the mortgage are similar to rent,

he said.

Students can expect to pay about $1,200 a month for mortgage on a $200,000 property, he said.

"If you rent out some of those rooms, you can be paying $250 to $300," he said. "That's pretty good, and it's your own house."

After students graduate, they can sell the house and usually make a profit, Thom said.

When you sell a house, you get back the equity, which is the value of the property minus the amount owed on the mortgage.

"If you pay $50,000 in rent over four years, you're basically out $50,000," he said. "If you've spent that on a mortgage, and you sell your property, you're getting all of it back."

Most property, especially in the UNM area, gets more valuable every year, he said.

That means students who buy houses could make money on top of getting back the money they spent on the property.

"You can come out of college with thousands of dollars," he said. "You get this financial jump-start on your life, and all you did was live in a house for four years."

Appreciation on property around UNM is as high as 12 percent annually, he said.

Down payments on mortgages are usually about 5 percent of the mortgage, Thom said.

However, the Federal Housing Administration has loans for students that have down payments as low as 3 percent, he said.

Students who take out the loan can co-sign with a blood relative and benefit from their relative's credit, he said.

"A lot of people think, 'Oh, there's no way I can do this. I'm sure I don't have the credit,'" he said. "But with these loans, you can instantly be treated like you have a lot of credit."

Thom said many students who could benefit from buying property instead of renting don't know that it's an option.

"I think people just aren't educated about it," he said. "They hear all these terms that they don't know what it means, and it just scares them away."

Although there are advantages to buying, students should be careful, he said.

"You really need to make sure you look at all your options," he said. "Interview a lot of mortgage lenders and see what you can

find out."

Students should also be careful to buy a home that is in good condition, he said.

"Some homes in the UNM area cost a premium, but they still have a lot of work that needs to be done on them," he said. "That's probably not something that students would want to get involved in."

Buying a loft instead of a house is a good option for students,

he said.

"It's a matter of taste," he said. "But with a house, you've got a big backyard and lots of other upkeep."

Ryan Bromberg, a broker with Venture Realty, said lofts are good for students because they provide a community of homeowners.

"If you move in somewhere with a homeowners' association, you have a group of people right there that have the same interests as you," he said. "You're part of a team."

Students who buy a house should consider getting a home warranty, which can cover things such as plumbing and roofing, Thom said.

"One of the benefits of being a tenant is that your landlord is obligated to take care of things that go wrong," he said. "If you get a warranty, though, you're covered pretty well."

He said the UNM area is one of the best places in Albuquerque to buy property.

"There's so many things going on here, and there's really no more land for new buildings," he said. "Because of that, this property is just going to get more and more valuable."