In real estate, all the planning I do as an agent is based on what I want to happen 90 days from now. Everything I am doing right now will come to fruition in three months. Looking forward, three months from now is the fall. It’s hard to think about cooler weather and back to school when we are enjoying the neighborhood pool and family vacations.
With four college-age kids, I’m always thinking about college – always! Questions like: Are they ready for next year? Are they going to change their major yet again? How’s the budget looking? Where will they live? Some of these things are beyond my control. But two of them I can manage easily – the budget and the living situation.
Over the course of our kids’ lives, my husband and I had put away money for their college years – traditional savings accounts that would yield a traditional nest egg for them. As we approached the first kid being ready to “launch,” I began to think bigger. I had been doing a lot of research on investment properties, and I had a big idea. We took a gamble and used a portion of the college money as a down payment on a house.
My kid moved into one of the rooms – and not the best one, mind you. We rented out the other rooms to my child’s friends or other college kids. Each room had a lock and key and a separate lease. While my child lived in a great house, the mortgage was paid by the roommates, and in four years, we sold it for a very nice profit. Boom – budget and living-situation problem solved! We currently are amid what I like to call a “rinse and repeat” for the other kids. This crazy market certainly has helped the plan work extremely well for us.
Have kids nearing those college years? You can put this plan into action as well. If implemented carefully, you will make a profit and have peace of mind about where your child lives during this time of his or her life. There are a lot of moving parts in doing this, though. Make sure you enlist a Realtor who has expertise, not just in the housing market but also in the rules and regulations of your child’s college system.
– Joannie Bates is a Realtor for Keller Williams Signature Partners. She works with clients in the surrounding area, with a focus on luxury and investment properties.