You can use real estate to pay your kids college education. Believe it or not, many parents these days afford to pay for their kids’ education by investing in real estate. But you have to do it smart for your investment to pay off.
Property can be extremely profitable when managed correctly. Rather than struggle to provide your children with the best education, let your tenants handle the financial part.
It might seem too good to be true, but it works. People have been investing in property for decades. It is one of the most stable ways to make a passive income without breaking a sweat.
Here are some guidelines on how to get started:
Buy the property
The first thing you need to do is to decide on a property and buy it. However, don’t just choose the cheapest house that only looks good on the outside. Be smart and do your homework.
Assess the area before investing, and consult with a skilled advisor to help you predict whether or not the land has potential to increase in value, or devalue 10 years from now.
Think into the future – this is the secret to investing in real estate and getting outstanding returns.
Buy and restore/renovate
If you don’t have a very big budget for the fanciest house or apartment building in an area with great potential, buy a more modest property.
Use only 70% of your budget, and save the remaining 30% to restore it. Contrary to popular, investing in real estate and then doing some renovation work to get back on its feet it not that nerve-wracking.
All you need to get started is a good contractor. Location is extremely important. For your house to increase in value, it has to be located near schools, convenience stores, grocery shops, parks, and major roads.
When people rent a property, they don’t want to walk 20 minutes to get to the nearest public transport station. The exact same thing goes for shops and parks.
Know the perks of investing in real estate
When you have children, it’s only natural to want to look after them, no matter their age. Most parents don’t want to invest in assets that are “uncomfortable”, such as stocks or bonds.
These are way too risky. Real estate on the other hand, is a tangible form of investment. No matter what happens, you have something palpable to give them when they head over to college.
To a parent with little experience in the investment business, there’s psychological difference between intangible and tangible assets. Rather than take a high risk with stocks or bonds, many would rather stick to real estate because it’s safer.
Even if you lose some money on maintenance and restauration, the property is still yours to keep.
How real estate can be used to pay for your child’s college education
As opposite to other assets, property is a sensible way to generate passive, continuous income. Rent your property and collect monthly rent. Use it to pay for your child’s tuition.
In the beginning, you might have to raise more than just a month’s rent. The best colleges and universities around the country cost a lot of money. Nonetheless, there’s really no need to despair as property investing can generate a good profit.
Another great benefit of property is that it have the potential to appreciate in value. It takes time for this to happen, meaning that you must have patience.
Don’t rely solely on appreciation, and remember that cities and areas that are in constant development have the best chances to increase in value over the years.
If you don’t have a big budget to purchase a property in full, you can always apply for a mortgage. This means that you only need a down-payment to buy real estate and start generating profit.
Basically, you can be in control of the property (as well as its equity) while paying only a small price of its total value.
Bottom line is, real estate can be a very profitable form of investment. It can be used to pay for your kid’s college or universities fees, and 10 years from now, you can just offer that property to them; they can use it as student accommodation, or build a family and lead a comfortable, stress-free lifestyle.
Disclaimer: All blog posts of getmoneyrich.com are for information only. No blog posts should be considered as an investment advice or as a recommendation. The user must self-analyse all securities before investing in one.