Real Estate Investing

Gee, who wouldn’t love for their parents to buy them a $200,000 home as a “Welcome to College” gift? Apparently, that dollar figure is on the low end of what parents are spending these days, according to a real estate article on MSN. There are many pros to this seemingly outlandish scenario, however.

1) Sign your son or daughter up as a co-owner and help build their credit.

2) Increased odds that the “empty nest” to which you’ve become so accustomed will stay that way.

3) Make the college housing quandry benefit your pocketbook instead of throwing money away on it. Make money off monthly rent from co-occupants and appreciation from resale.

4) With your son or daughter listed as co-owner and resident of the property, receive the owner occupied interest rate on a mortgage.

5) As a result of #4, no capital gains tax upon resale.

Investing in student housing isn’t all roses, however. There are many unknowns, including whether the son or daughter in question will drop out of college. It seems there would be no shortage of renters as college-funded housing becomes increasingly scarce, especially for students who are older, married or have children. However, if the property is to be sold in four to five years, there might not be enough time for it to appreciate to any great degree. Hypothetically, if the stars align and the son or daughter graduates and even decides to stay in that town for a while, they will have learned an invaluable lesson in real estate landlording, ownership and appreciation.