College is only a few years away…18 or so…
So… why am I blogging about college as a realtor? Well most folks purchase their first home as an individual or new committed couple aka marriage. Time goes on and their family starts to grow. Great… you think. I have the perfect home for my family to grow up in. That is true. But let’s think a few years down the road. You now have 2 kids and a dog. Well the dog may not need to go to college, but I’m guessing you’d like your kids to go.
So now you’re thinking, I have a few dollars set aside. What do I do to secure funds for when my kids go off to college? 529k maybe… or just buy some stock or something. Either of those could work. One defers taxes if for higher education and the other doesn’t. But that’s a conversation to have with your financial planner. As a Realtor, I’m here to suggest purchasing real estate.
So your kids are maybe 15 years away from college. Why not purchase an income property and let the equity build as you receive a rent check. In 15 years, you’ll have some equity and appreciation you can use to fund college or sell it and do a 1031 tax deferred exchange into another property where your kids will go to college. Collect rent from some of their college mates. This will allow you to defer taxes on any gains you received on the property. You could even take some of the equity to help pay for college (taxes may apply in this case).
So keep in mind you have other options when it comes to ‘saving’ for college. Let us help you build a plan for yours and your families future.