Save for Down Payment, Pay off Student Loans, or Mix of Both?

[Logan Sherwin]

I am currently a college student interested in starting my real estate journey after graduation. I was looking into house hacking after graduating, but I am going to have a lot of student debt to pay back. Does it make the most sense to save money earned while in school and in summers for a down payment on a multifamily property to house hack, and continue saving for future house hacks/real estate while paying back my loans on time? Or should I prioritize paying down principal on my loans while in school and pursue a debt avalanche-type strategy to pay down my loans faster after I graduate instead of saving for a house hack? Or should I do a mixture of both? I was originally considering saving for a house hack while in school and using the profits coupled with saving income to use a debt avalanche strategy to pay down my loans faster after graduating, while also saving a small sum for a similar house hack/property after my first, but I wasn’t sure if there were better options.

Thank you so much in advance for your guidance!

[Scott Passman]

There are a lot of variables present (loan debt amount, interest rate, rental rates in your area, etc), however, in general you would likely get the best bang for your buck by househacking.  The amount of monthly expenses you would save would likely add up to much, if not all, of your student loan debt obligations plus you would own an asset which is likely to appreciate over time and that you are building equity in for the long haul.  Plus, I personally wouldn't put anything additional into student loan payments right now because there is such a heavy push from the democratic platform to pass some type of loan forgiveness that unless someone has a ridiculously high interest rate, it may be best to see what comes of this before paying additional money towards the principle.