Invest In Yourself… And Your Future
Real Estate is typically a solid investment because it appreciates in value over time. Housing is something we all have to pay for in some way or another and it’s smart to make it work FOR you than for someone else. More and more people are looking for creative ways to invest in their future and produce income outside of their regular job.
You may have seen reels and articles pop up in your feed about how you can use real estate to save for college rather than a traditional college savings account which are great but can limit how you use them. I had friends that invested in a couple of rental homes with tax benefits when their sons were young and used the proceeds of those sales to pay for their son’s college tuition.
As a military family, we moved often. Every time my parents bought a house, they did their best to make the best decisions for resale as we moved so often. Since I was five years old, they would take the majority of those proceeds, including a rental house they sold my senior year of high school that they had for nine years, and put them into a savings account for me. That savings account, built and grown by real estate, paid for all four years college, a sorority, dance team, a car, living expenses and the ability for me to graduate without any debt. I am forever grateful to them for that gift.
Another way to invest in real estate for college is to purchase a home for your college student. Again, you’re going to pay for rent anyway, you might as well pay for a mortgage and invest in yourself, them and your future while you’re at it. You could even have roommates pay a portion of the payment to make up the difference between what you would have paid for rent versus a mortgage.
I just bought my two college kids a home. My oldest is a junior and my middle is a freshman at the same university, and I have paid for three years of dorm or apartment rent. Knowing what the cost of two different apartment rents looked like, I decided I was better off buying a home that will appreciate over time and allow me to invest in real estate in a smart and safe way. And if my kids moved out after graduation, it could become a long-term rental and if they didn’t, it still becomes a long-term rental…just with my kids paying the rent!
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I helped a friend purchase a home last year for her daughter who is friends with my daughter and attends the same college. My friend is also a Loan Officer and knows a thing or two about real estate and numbers. She was really smart in how she did it, because it wasn’t just an investment home. It is a primary home for her daughter which allows for homestead exemption and tax increase protection. Absolute GENIUS.
In order to purchase a home in your college student’s name, they need to have a strong credit score, which most college students do not have. So, you can either cosign a small loan for them (like if you’re helping them buy a car anyway) or you can just simply add them as authorized users to your credit card – without them actually having access or using the card. I added my kids as authorized users to my credit card and within six months, their credit score qualified them for a conventional loan to purchase a home in their own name with me only as the co-signer. This means it is their primary residence and they can file for homestead exemption with protects homeowners with no more than a 10% property tax increase a year.
They will be sharing the home together and all bills and responsibilities, with us just ten minutes away to guide in the adulting and maintenance. They will learn valuable lessons of home ownership and financial responsibility, and they will have a forever home and a soft place to land as long as they need one. They will have two roommates that will help contribute to rent and utilities – which they would anyway, but this way it’s contributing to our future investment instead of some stranger’s profit and future.
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They have seen us buy and sell homes enough to know that the better you take care of it, the better off you are in selling it. When we sell it, we will keep the majority of the proceeds, as we are the ones that put the money into it, but we have promised a small portion to each of them when they have full time jobs to help invest into their future. This is a huge incentive for them to take the responsibility and care of their home seriously.
I am so fortunate that my parents modeled this for me and provided for me in this way. I am honored to do the same for my kids and teach them the value and pride of home ownership and financial investment. Knowing that my kids are in a safe place, and to be honest, that I will not have to move them in and out of a lease every summer (IYKYK), brings me a lot of peace.
It’s been an exciting journey into real estate investing, other than just our own personal homes, and I am so excited for the next one!
If you have any questions on how to invest in real estate, whether it’s for college or anything else, I am here to help! Investing in real estate is investing in yourself and your future.
