College fees have gone up to over $65,000 a year says Troy Onink, a contributor for Forbes. When planning for the future of your child, budgeting does not stop at tuition alone as there is still the cost of room and board that you need to consider. Onink suggests that buying a rental property for your kid and for a couple of roommates where they can live may prove to be a practical move – for funding education, tax deduction and for your own retirement.
Onink further recommends that once you own a rental property, you can ask your child to manage the place and his income may be used to pay for the tuition, with little or no tax. The rent of his roommates on the other hand, can help pay the property’s mortgage. After his graduation, which is expected to happen after four years, you may keep the property to be your retirement home. Once it is paid off, a 1031 exchange may be done which may defer the tax on capital gain as long as you will purchase a “like-kind” property in a location you want to retire to.
Ilyce R. Glink, in a post at ThinkGlink , says that while many people think that stocks and bonds are the best investment for retirement, it is also good to try other investments.
Onink also shares that an outstanding real estate professional from Tallahassee, Florida ,Gene Rivers, are consulted by parents whose kids are to attend college and who intend to buy a rental property live in and rent a couple to some roommates.
Rivers says that foremost, the college student must be responsible enough to screen his roommates, do a credit check if needed, enter into agreements, collect rent and keep the place in a good condition. “Parents cannot be absentee landlords, “says Rivers. If your child is not the manager type that’s fine according to him.” You just need to know that going into arrangement to avoid stress for your studying student and yourself. Know who the landlord is and what the responsibilities are,” he adds.
Read the full post in Realty Today
