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Purchase your childrens college living space instead of Renting for years.

By Timothy Butterworth

Real Estate Agent with Taking a break

December 15, 2008 02:55 PM

This is not a new trend but many parents are not taking advantage of the market.

Looking into home investments for your college bound children.

Rents for apartments and homes have gone up while at the same time real estate prices have come down.

If your budget permits you to be creative, I would like to suggest a way to provide a place for your child to live while in school and position yourself in a market that is more attractive for buyers at this time.

JUST A THOUGHT

College Children rents for 4-5 years ( hopefully). Avergage cost in Oregon $45,000 roughly for a single bedroom appartment. This could very well go up over the next few years, I honestly do not know. But for 5 years that is a chunk of change.

Investment property could be a very nice solution instead of throwing money away on 4-5 years of your childs housing with no return at the end. Consider the purchase of condo or house close to your childs college.Recruit a roommate to help offset the cost of the mortgage. Yes there will be extra upkeep on the home but that can be sorted out between your child and yourself. If it can not be worked out then you will have to factor in that extra part. As the owners of the property, you can write off mortgage interest costs to provide a wonderful tax benefit (Talk to you tax advisor for information on how much you can write off.)

CONFORMING - (up to $417k)

30yr fixed 4.875% (5.060apr) - Owner-Occupied purchase or rate/term refinance

30yr fixed 5.500% (5.729apr) - Investment Property

15yr fixed 4.750% (4.940apr)

3/1 ARM 4.600% (5.023apr) - fixed for first 3yrs

5/1 ARM 5.100% (5.536apr) - fixed for first 5yrs

30yr FHA 5.000% (5.439apr)

JUMBO - (over $417k)

30yr fixed 5.875% (6.136apr) - up to $600k at this rate, slightly higher to $3.0mil

5/1 ARM 5.100% (6.111apr) - up to $750k with no mortgage insurance

Best to you and yours.

Timothy Butterworth

Real Estate Broker

Corporate Office

215 SE 102^nd, Suite 300

Portland, Oregon 97216

503-960-4589 Cell

503-287-3417 office

503-287-4657 fax

timothybutterworth@comcast.net

LICENSED IN THE STATE OF OREGON

Comments(10)

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Brian Belcher

RE/MAX Executive - Charlotte, NC

Charlotte Realtor

Hey, this is a great post. Buying a home for a college living space is a great idea.

Dec 15, 2008 03:00 PM

Taking a break - Portland, OR

Brian Thanks for the comment, yeah I like the rewards after the years go by. some of my close friends did this years ago and had lots of roommates, they made a killing with the market turned. They never paid for their own mortgage really.

Dec 15, 2008 03:08 PM

Paddy (Patricia) Pizappi

Better Homes and Gardens Rand Realty - Pine Bush, NY

Real Estate Associate Broker Hudson Valley NY

Timothy I am actually closing on my son's college house this week. We will rent out the other rooms in the 3 BR house. We are close enough to the college to keep an eye on it but if it were further away I would most likely hire a rental agent to keep things in order. More poeple should think of this option.

Dec 15, 2008 09:39 PM

Tina Merritt

Nest Realty - Blacksburg, VA

Virginia Real Estate

We built a college home for our son when he was 1. Gives us a place to stay during football games until he reaches college age. Unfortunately, I love going there so I haven't been able to rent it out. But with my Libor ARM at just 4%, it doesn't hurt the checkbook too much!

Tina in Virginia

Dec 15, 2008 11:37 PM

Eugénie Eckler

Right At Home Realty Inc. - Oakville, ON

Oakville, Ontario

I would give this advice to my sister since my niece goes to University but I guess it depends where - she goes to school in NYC... nothing cheap there! You are right though- for some places... this is a great idea.

Dec 16, 2008 01:05 AM

Holly Weatherwax

Associate Broker, Momentum Realty - Reston, VA

A Great Real Estate Experience

We looked in to this, but the uncertainty in the market around the school made it, at best, a 'don't lose too much' proposition. I also have a very picky daughter...she wants to be in the middle of the community where all of the students rent (units are not individually for sale). At first we objected to that since we wanted to buy, but in the end, she will probably be safer and have better access to school supplied transportation. We were trying to avoid buying another car, and I think by letting her live in this development, we have succeeded in avoiding that. We have another child following in 2 years and her plans do not include the same college--if 2 of them were at the same school it would have made more sense for us.

Dec 16, 2008 01:26 AM

Tony and Libby Kelly

Keller Williams Realty Portland Premiere - Lake Oswego, OR

CRS, ABR, ePro, SRES, CLHMS, CDPE

It really is a good idea in this market. Thank you for pointing that out.

Dec 16, 2008 02:29 AM

Randy Miller

Real Estate Specialist at the Pennsylvania Dept. of Transportation - Harrisburg, PA

Just a reminder as mentioned by others in other threads over time: If you're going to buy for the student, look into the FHA Kiddie Condo Program as a low downpayment owner occupied program.

Dec 16, 2008 07:59 AM

Fred Chamberlin

Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA

Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Timothy - good advice. As always, it isn't for everyone, but it is a good way to save money on housing. Regarding the Kiddie Condo referenced above, look into my recent post. If you kid is going to live in it, it doesn't have to be an investment property.

Dec 16, 2008 08:45 AM

Thanks Everyone for you wonderful comments and input.

I agree with you all. Like any situation, the correct answer and solution will depend on the circumstance and parties involved in it. I can toss an idea out but I would never venture to go through the affairs of people to sort out the correct answer for them. Everybody has brought up great pro and cons. As is life we have them every day with everything we do.

Choose wisely and think things out carefully before making a big step.

I know of many parents that thought sending there children to school for the first 4 years was a waste after the grade came back to but as time passed those same children seemed to somehow. Grow up a little.

Best to everybody. Sorry I am be lazy at the moment to write personal thank you's to everyone but know that I Thank you all and really Aprreciate your thoughts.

Thanks FRED

Thanks RANDY

Thanks JOHN

Thanks TONY AND LIBBY

Thanks Gabe

Thanks Holly

Thanks Jim

Thanks Eugene

Thanks Peggy

Thanks Tina

Thanks Paddy

Thanks Charlotte

And were did your Comment Go Brian? :(

Dec 16, 2008 04:06 PM

Purchase your childrens college living space instead of Renting for years.

Comments(10)

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