Thursday, October 31, 2013
College Rental Properties - Rent Or Buy 7 Steps to Big Savings With College Rental Properties
Undergraduate Devon is a college freshman and will be moving from her on-campus dorm to an off-campus housing apartment. She is looking at rental rates of $525.00 plus her split of the utilities which is $23.00 per month these are $160.00 more than her current dorm costs. There must be a better way...Her online search for rentals leads her to an ad by "OffCampusHousingUSA" the rental rates are in line with other properties and they also have properties "For Sale" Homes, Townhouses and Condos. With the help of her parents and an "OffCampusHousingUSA" registered Broker undergraduate Devon purchased a 3 bedroom, 2 full bath home and is saving over 65% of her previous monthly rental costs. And she is building equity by using her roommates rent to pay down the mortgage. Here's how she did it.1) College Rental Ownership - helps lower college/university living costs by your roommates paying rent to you which covers a large portion if not all of your mortgage. Big possible tax benefits (see your tax advisor/attorney) in depreciation, property taxes and mortgage expenses being paid by someone else. Location is always a big concern as is walk or drive to campus.2) Work with Local Realtor - Devon and her parents worked with local a "OffCampusHousingUSA " registered Broker. They have choices of new construction or older properties as single-family, condos or town homes. At home she viewed properties on-line and visited the most promising with her parents and broker to narrow down the top 2-3 to analyze costs. Devon and her parents pre-qualified for a mortgage with the intent to be co-owners which could pass tax benefits to the parents.3) Offer to Purchase - It is time to make your offer to purchase on the best property that fits your needs and requirements. After reviewing with with your broker all of the required forms and contracts. Your broker will help you prepare an estimate of costs for purchase and ownership. With all the facts you can make an informed offer to purchase. Have your attorney and financial advisor review the cost estimate and all contracts before signing.4) Rental Leases - With the property under contract it is now time to confirm your rental roommates. A rental lease agreement is an absolute requirement and having your roommates parents as responsible for all payments not just a co-signer of the lease. Have your attorney review all contracts before delivering to roommates for signatures.5) Closing/Settlement - before closing you should have the property inspected by a licensed local home inspector, a licensed pest control company for a termite certification, a property survey on single-family homes and a title search with an owners title policy for the full purchase cost is a must.6) Move-In - Paint and decorate your way without worry of redecorating/repair payments to the landlord. Roommates will provide their own bedroom furniture and you may all split the costs of other furniture, kitchen appliances according to your lease agreement. No new yearly moving expenses, deposits or rental searches for you.7) Management - Manage yourself or hire a local property management firm your "OffCampusHousingUSA" registered Broker can help you locate a local firm. A property management firm will add to the monthly costs but having some one take care of maintenance could be well worth writing the check if you are hundreds of miles away. Don't make your student the landlord it could open more problems than you will have in savings.