image source: Shoko Design
Okay, so maybe not pay for themselves entirely, but significantly. And we aren’t talking about doing anything unconventional in the structuring of these mortgages. Just a few small steps that can save lots of money.
So your kid is going to college or graduate school, and you are thinking about investing in a condominium for that duration. Here’s what you do . . .
Step 1: Student opens a credit card.
This is for the purposes of establishing a credit rating which is necessary for your son or daughter to be included on the mortgage. Charge items to this card and pay the bill on time.
Step 2: Co-purchase condo w/ student as owner occupant.
Your son or daughter then gets an owner-occupant mortgage on the condo with you as a co-borrower. This is where much of the savings comes from since an owner-occupant mortgage has many advantages over an investment/second home mortgage including a lower downpayment and better rates.
Step 3: File for homestead exemption on property taxes.
Since your kid has purchased the condo as an owner-occupant and is living there, he/she may file for homestead exemption and save significantly in property taxes.
Step 4: Reduce mortgage payments by renting additional rooms to friends.
If the condo is a 2 or 3-bedroom, rent on the additional rooms can help greatly offset the mortgage (which, you’ll remember, you got at owner-occupant interest rates).
Step 5: Sell condo at a profit.
Hopefully you used a competent real estate agent (hint, hint), and you bought at a fair price and location. Four years later and barring any market crashes, you should be able to sell at a profit to the next set of parents looking to do the same. There is always a demand for college condos since there is always an influx of inhabitants.
Afterwards, your son or daughter will have a stellar credit rating, and you will have spent a fraction of the cost of four years of rent. If you are considering investing in a college condo for your kid, I can’t imagine why you would do it any other way.
P.S. Did you notice the kitchen in the featured photo uses the “warmth + contrast” idea discussed Thinking Outside the Kitchen Reno Box post?
