984: Pay Off Student Loans or Invest in Real Estate: Which Makes You Wealthier?

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 8 July 2024

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

Should you pay off student loans or invest in real estate? This is the question Tom Keating had to ask himself back in 2018. At the time, he had no real estate investing experience and only picked up The Book on Rental Property Investing by chance. He still had student loans but decided to spend his savings (which could have made him debt-free) on the down payment for his first rental property. Now, just six years later, Tom has an entire real estate portfolio of passive and active investments and is free from his W2! If you’ve got some form of debt—student loans, credit card debt, medical debt, etc.—you might think you can’t invest in real estate, but you’d be wrong. In today’s episode, Tom breaks down the simple equation you can use to figure out whether you should pay off your debt or invest. Tom took the path less traveled, and now, he’s benefiting from it, being able to go anywhere in the world, live where he wants, and control his schedule. Tom also shares a simple yet unbelievably valuable way to find the hottest real estate markets and areas to buy rental properties. The best part? The data he uses is FREE, and you can copy his same strategy to get cash flow, appreciation, or a bit of both! In This Episode We Cover Whether to pay off student loans or invest and the simple calculation you can use to decide The super simple way to find hot real estate investing areas with appreciation potential Quitting your W2 job and becoming a full-time real estate investor, even with a small portfolio How to diversify your real estate portfolio with both passive and active investments Why Tom invests across multiple states (and strategies) instead of drilling down on one area And So Much More! (00:00) Intro (01:41) Serial Side Hustler (05:29) Buying His First Duplex (06:57) Invest vs. Pay Off Debt (12:42) Tom’s Portfolio (14:40) Investing in Multiple Markets (20:01) Finding Hot Investing Areas (26:08) Working Less, Making More Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-984 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	According to US Census data, about 43 million Americans have outstanding
0:06.4	federal student loan debt that's about 13% of the US population and when you
0:11.5	factor in other types of consumer debt, whether it's credit card
0:15.6	debt or auto loan debt, Americans generally speaking have a lot of debt. And for some
0:21.6	this feels like a major obstacle when getting started
0:24.6	investing in real estate or just buying a primary home. And there's no one-size-fits-all
0:30.0	answer to this. Some people think that you should pay off your debt before you
0:34.4	invest in real estate. Other people think the opposite. They should invest and
0:37.8	use your profits to pay off your debt. And while there's no right answer, there are some tips and tricks you can use to figure out what's right for you.
0:46.0	And today we're going to talk to a guest who has done these calculations for himself,
0:51.0	and he's going to share with you his story about how he got
0:53.9	started investing in real estate even with student loan debt.
0:59.4	Welcome to the BiggerPockets Real Estate Podcast. I am Dave Meyer. Today we're
1:07.2	talking with investor Tom Keating and in our conversation we're going to focus a
1:11.8	lot on how Tom got started investing in real estate just
1:15.6	a couple of years ago even when he had student loan debt and he's going to share
1:20.2	with you why he still has student loan debt even six years into his
1:25.1	successful investing career and why he thinks that this might make sense for a lot of
1:30.2	other investors out there and top is also going to share with us a pretty cool system
1:34.8	that he has developed for picking markets to invest it. Tom has a lot to share so let's bring
1:41.1	them up. Tom welcome welcome to the podcast.
1:43.5	Thanks for joining us.
	...

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