Last Updated on Tuesday, 4 September 2012 01:38 Written by Ebiz Wednesday, 5 September 2012 02:55
As students prepare to go back to school, money-savvy parents prepare in their own way as well. In fact, the smart parents have been preparing by looking at real estate around their son or daughter?s college for quite some time. These parents may really be on to something.
The benefits of investing in student housing do not end at saving money on room and board fees. In fact, they can provide a source of revenue and in some cases- even a tax break.
Some individuals choose to invest in property at or near colleges, and then reclaim it after their child is done with college in a few years. The trick is to make sure they are making a sound investment choice, the benefit being that their child can stay there and use the property for the duration of their time in college.
Families first need to decide whether they are buying the property as their second home or if it is only an investment. If it is only an investment, it needs to be run similar to a business, with the costs of business and also depreciation deducted from rental income. While this would require record-keeping, the benefits are great and may even include a tax break.
Going in on this investment with your child is a great benefit to them as it prepares them for the future as well. Most college students are not making anywhere near the income that it takes to finance a home. This?doesn?t?mean that they can?t go on the mortgage though. The housing will be considered ?owner-occupied? if the student goes on the mortgage and the benefits will be great. Students will get a lesson in not only building credit but also caring for property.
Owner-occupied residences generally meet the terms for lowered mortgage rates and down payments. One significant advantage of claiming the residence as a second home would be that the parents get to deduct the mortgage interest and property taxes as well. It is important to take advantage of this factor, but also to remember that an individual can only claim two properties.
In the 2000 to 2010 decade, enrollment in college raised about 35%. Interest in student housing seems to be rising at a steady pace right along with the enrollment statistics. As a result of the steady rise of enrollment in colleges, it is often a safe and sound investment choice to finance a rental property in or near a college town.
Individuals who plan to jump on this opportunity may want to do so soon. Competition for properties next to or near campus is at an all-time high and shows little to no signs of slowing down. Not only is there competition from other individuals to think about, but also competition from colleges themselves. Colleges are expanding by the minute, particularly their on-campus housing. Many colleges are going as far as clearing old residential housing and neighborhoods from their surroundings, and replacing it with on-campus housing. Cities will often fund and side with the college, as colleges are usually always beneficial to the city- financially and educationally.
When it?s time for back to school, why not cut costs where you can and in doing so make an investment that will be sure to be successful in the future? Taking out loans such as bank loans or payday loans may help short-term but won?t have any kind of return investment.
This entry was posted on Wednesday, September 5th, 2012 at 2:55 pm and is filed under Budgeting. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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Source: http://blog.ebusinessdebtrelief.com/?p=240
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