As most parents are painfully aware, the cost of higher education in California has grown exponentially over the past decade or so. While many focus on the cost of tuition, the housing costs make up a larger portion of the overall expense.
My wife and I put three children through college, and to mitigate those expenses, we chose to buy and in some cases lease property to accomplish two things. One, to reduce the cost of housing while the children were in college…and two, to help them own their first home after they graduated.
In all cases, we were able to significantly reduce our housing expenses, and in every case we were able to help our child into home ownership…without breaking the bank.
Every situation is different, depending on where the child is attending, but the solutions are out there…here’s an example.
We always required our children to live the first year in the dorms, to acclimate them to college life. In the second year, however, for our youngest, we found a nice 4 bedroom home in a good part of town, within biking distance to school, and plenty of part-time job opportunities in the area.
The home was listed on the MLS for sale, after viewing it I crunched some numbers, and elected to go with a lease-option offer rather than a purchase offer. I knew the owners were investors, and that we had a shot at acceptance. The listing agent didn’t really understand these types of transactions, and stood to lose some commission, so I requested that I present the offer.
Long story made short, I made them an offer they couldn’t refuse, and that I was comfortable making, and for 5000 down I tied up the property for 3 years…the time remaining for my child in college.
After renting out the other three bedrooms, my net housing expense for the next three years was 350/mo., well below what a dorm or an apartment would have cost. Additionally, she was able to live in a very nice home, and was in a position to buy it at the end of the term.
You’re only limited by your imagination when it comes to putting deals like this together. I’ve done dozens of them, and can walk you through the options. It gets even better if you buy, with tax benefits…but the bottom line is getting your child in safe, comfortable housing, and mitigating the rising costs of education.