Property near college campuses has always been a prime investment arena. Now,it can be the key to funding your child's education. Three months before your son or daughter starts college, buy a well-maintained home within two to three miles from campus. When choosing a house, keep the following in mind.
Make your son or daughter the property manager of your rental property.
Making your child the property manager allows you to reap tax and business benefits, while also teaching your student about the business world. You could easily pay your child a small stipend to handle the responsibilities of a property manager. These include:
The salary you pay your child for being the property managemer is tax deductible. This deduction can go towards your student's books, supplies, or food expenses.
Save on gas money when visiting your child. Another perk to owning rental property is that you are allowed a tax deduction twice per year in order to inspect any out-of-town property. The primary purpose of your trip must be inspection and maintenance of your property. However, visiting your child may be a secondary purpose. Be sure to document all trips and their purpose.
Use the real estate Tax Deductions to generate extra cash.
The depreciation deductions you claim each year on your rental property give you immediate cash, which can be used toward college expenses.
Finally, your child has graduated and its time to sell your property. Use the profits from your investment to pay off your loans. At 8% per year appreciation, the property will be worth $ 20,000 - $40,000 more at the end of four years, depending on the original price.
Because housing in college areas is in very high demand, your property's value should increase substantially. The best and easiest way to sell your property is to list it in the school and city newspapers with an ad that reads : 'Send your child to college free. Call me for details!' Most likely, you will recieve calls in the first day or so. Inform your prospects of how rental property can finance their child's education. This key strategy will enable you to pay off any pending loans and leave your college student debt-free!
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This info would be great in a perfect world. If I could afford a second mortgage I would be quite so concerned about college tuition. Aside from that we live at best an hour from a campus. I don't want the added hassle of taking care of another property. What college student is going to get up and shovel snow so as to not be fined? I am sure it is difficult enough to make sure the pizza box makes it to the curb.
If I had the money to purchase an extra home I could avoid the hassles of property managing college students and just pay for the education! I don't see how this idea would be possible for most families.
My daughter was 16 when she graduated from high school and entered UC San Diego was a 2nd quarter sophmore. US San Diego is in La Jolla where almost any home sells at least one million dollars. Too bad your advise certainly doesn't apply to our family. There was no way we could afford a million dollar home and absolutely no way we could have our daughter become a property manager. We did save money because she had completed most of her under grad requirements in high school but she did have to live on campus because the daily driving back & forth from our home in Carlsbad and the cost of gasoline would have killed us.
I hope your advise is helpful to someone else.
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