Sellstate Access Realty - Buying a Rental for Your Student

By
Real Estate Agent with Striker Realty

There are many advantages to buying a property for a child who's in school. But, before you start looking for just the right rental, you may want to think about loaning your child the money so that he/she can buy a house. A friend of mine did this for his two daughters (same school, a year apart), they kept the house after graduation and found jobs in the area and stayed there.  Eventually they did sell when getting married, and he was 'paid back'.

Remember there are tax implications for owning rentals. First of all, you'll have to pay taxes on the rental income. Also, you may be subject to capital gains taxes when you sell the property. The tax laws concerning non-owner occupied housing are quite different than the laws that cover a home that is your primary residence.

If you work out a situation where your child buys the home, then your child will learn the ropes of homeownership with you at his/her side. Because it will be his/her primary residence, he/she will be exempt from capital gains when selling the property.

Of course, not all parents can afford to loan this kind of money, but in today's financing climate, there may be several creative financing options at your disposal. 

Best regards,

Thomas Fiorillo

Sellstate Access Realty Network

 

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