A recent headline on Consumer Reports' August edition really caught my eye: "I Kind of Ruined My Life Going to College."
What are they talking about? Well, 42 million people owe a total of $1.3 trillion in student debt. What’s even more scary is that 45% of the people with student loan debt said college was not worth the cost. Additionally, 47% of these people said given the chance, they'd go to a lower cost school if they could do it over.
This bears the question: What is your plan to send your kids to college?
If you can begin planning now, you want to start saving. Savings accounts don't have great interest rates now, so you have to save a lot. You could invest in stocks, but who knows what the market is going to do?
What if you used residential real estate as college funding for your kids? If you purchase a property that you can rent out when your kids are young, it can be paid for in 15 to 20 years, giving you options when the time comes for them to go to college.
"What is your plan to fund your kids' college?"
You can sell the home and use that equity to fund their college. You could also continue leasing the home and use the monthly cash flow to pay for college.
A third option would be buying a house here in Athens if your kids are going to UGA, for example. You could rent the house to them to eliminate room and board costs, and charge their roommates rent to pay for college expenses.
Remember, this strategy is not for everyone, but it's an option that I wanted you to be aware of. I think it's tragic for students to leave college with so much debt. It's hindering them from buying their first homes and saving for retirement, among other things.
If you have any questions about buying a rental or income-producing property, I'd love to help you out. Give me a call or send me an email and let's talk about whether this is a good option for you and for your kids' future.
