Quote:
Originally Posted by Tondtar
A word of advice to all the young ones here from someone who has failed to do this for himself and his kid :
If you know where your kid will be attending college, plan on buying a home or a condo/ apt. in that town if you can afford to do so. Anything is OK as long it can meet your kid's needs (which should not be much as a college student). There are several advantages to this :
1. Your kid does not pay rent or have to worry about mailing in the rent check late while in college. You are the Landlord. A huge piece of mind.
2. All the money you spend on the mortgage while he/ she is using the place, you probably get back after 4 years or more and then some. So, there is huge savings as well smart investing there.
3. After getting out and getting a job, if he/ she can afford to take over the mortgage, pass it on to your kid and do it immediately after they get a job. This way they will be building equity of their own right off the bat. If he/ she can not afford the mortgage immediately, go ahead and carry it for a couple of years or so and use its rental income to offset its mortgage cost (or better yet, cover the whole mortgage payment assuming the rental rate and property values have appreciated considerably during years of ownership). You can then sell the property and give the profit to your kid as a gift to place as a down payment on his/ her own first home/ condo purchase when they are ready to do so.
Anyway you look at it, there is a huge financial win in this simple strategy if you can implement it right.
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My grandfather did this on a condo in Brooklyn Heights when my Dad was in law school. Allowed my Mom and Dad to put a very large down payment on a house on an acre in tony Chappaqua when they were 25 and 26.
I'm currently in school in L.A. and I [my parents] are renting. If in another year after I've been here for two years I still like it here my parents will buy something for me to live in for the following four years while i get my MBA. Hopefully after that my dad will be as generous as his dad was I'll either sell the place to buy another house or take over the payments on the place he buys.