If your college student is getting ready to live off campus, buying a rental property or condo may be an option worth considering. Of course, with high rental costs and the opportunity to create a tax shelter for your hard earned money, this is a strategy many parents have found to be beneficial.

An investment property is an excellent opportunity to put your money to work for you, and may even help offset some of the income invested into your child’s education. However, there are various factors you should consider before making any final decisions.

1. Long term goals – Although appreciation rates may be favorable, it is important to discern how long you intend to keep the property. Within a few years your son or daughter will be finished with their education, and you will still be left with a property to care for.

Some individuals would rather keep the home as an investment and continue to rent the property out to new students. Additionally, this may be a place that you will plan to use for future visits or football games long after your child is done with school.

The problem with solely relying on strong appreciation rates is that you may not be able to command the price you desire a few years from now. So unless you are prepared to hold onto the property for a longer time period to make the investment worthwhile, this may be something worth reconsidering.

2. Maintenance & management – Next, purchasing a rental property is a big investment, so you want to ensure that your property is kept in good condition. Although your son or daughter may be extremely reliable, you may need to consider other friends or roommates that will have to share in on the rent.

Are you comfortable with trusting in 2 or more college students to watch after your property? Also, it may be required to pay a property manager (especially once your child graduates) to help manage the home if you live at a distance. Finally, it will be important that you can find reliable contractors to take care of any maintenance hassles and ensure that the property remains in tip top shape.

3. Cash flow & taxes – After carefully reviewing the first 2 points, you may still feel that a rental property for your student is well worth the investment. If this is the case, then there are a few things you must know about finances. First of all, be sure that you are buying smart. Work with a qualified agent who knows the area and can help direct you to the best deals. They will be able to help you figure out projected rental income and appreciation rates as well. After factoring in taxes, insurance, maintenance, associate fees, your mortgage, etc. you will want to make sure that you have some cash flow for extra profit and to cover unexpected problems that may arise down the road.

This will also make your investment pay off more in the long run and can free you up to invest in future properties as well. For those who are married, you must be aware that there is a limit to how many itemized deductions you can write off if your gross income exceeds approximately $240K. Therefore, though it is possible that you can include the taxes and mortgage interest as deductions on your second property, this is something you will still need to review with a tax professional.

Finally, be aware that the property can also be susceptible to capital gains tax once you are ready to sell. Either way, you will still be eligible for some depreciation on your home and to write off a portion of your maintenance and utilities, so there are always good reasons to buy.

All in all, buying a rental property for your college student can be a wise investment for you and your family. We strongly advise that you take time to sit down with your financial advisor and/or tax pro to discuss the options available to you. For further guidance on locating a property, please contact us using the information listed above.

For more info contact (661) 726-0696 or Click Here To Email Us

For more info contact (661) 726-0696 or Click Here To Email Us

Pending home sales have gone up for three consecutive months. This reflects the broad impact of the home buyer tax credit and the affordability of houses, according to the NATIONAL ASSOCIATION OF REALTORS®.

Due to the sizable number of home buyers who responded to tax credit incentives, but may not be able close on their home purchase by the settlement deadline of June 30, NAR has asked Congress to provide flexibility on the deadline for closing.

Los Angeles Real Estate Update: Surge in Pending Home Sales Continues

Surge in Pending Home Sales Continues. Pending home sales have risen for three consecutive months, reflecting the broad impact of the home buyer tax credit and favorable housing affordability conditions, according to the NATIONAL …

Publish Date: 06/03/2010 15:56

http://larealestateupdate.blogspot.com/2010/06/surge-in-pending-home-sales-continues.html

If you want to save money on your home purchase in the Palmdale/Lancaster area, it’s a good idea to keep an eye on the local foreclosure activity. Property values have dropped significantly over the past few years and appear to have leveled out. Compared to 2006-2007 prices, most properties are an absolute bargain. This article helps put in perspective the foreclosure opportunities that exist.

You Can Find The Bargain Of A Lifetime In Today's Foreclosure …

You don’t have to be a genius to see that foreclosures often represent some of the best deals in real estate. The banking business is all about making loans to property owners and collecting mortgage payments, not owning property.

Publish Date: 06/02/2010 9:15

http://blog.webmagazinetoday.com/you-can-find-the-bargain-of-a-lifetime-in-todays-foreclosure-crisis

How long after foreclosure does it take before you can buy again? Jay Brinkmann, chief economist for the Mortgage Bankers Association says that “It could be well over seven or eight years before walkaways are able to obtain a mortgage to buy a home again.”

For those that have either had a short sale, the time frame to qualify to buy another home can be considerably less. We encourage those home owners that are facing a foreclosure, to weigh all of their options, especially the short sale alternative.

After foreclosure: How long until you can buy again? « Rightways's …

After foreclosure: How long until you can buy again? May 28, 2010 — rightways. NEW YORK (CNNMoney.com) — Walking away from a mortgage you can still afford to pay has consequences; everyone knows that. Your credit score is shot and it …

Publish Date: 05/28/2010 3:49

http://rightways.wordpress.com/2010/05/28/after-foreclosure-how-long-until-you-can-buy-again/