For millions of families, the escalating cost of college and student loan debt is a huge problem. So we spoke with real estate expert Doug Hopkins who’s showing how it can be cheaper to buy a home instead of renting dorms to house students. Read on for three ways to cut your student housing expenses by purchasing a house!
1. Cram in the Beds
The first step on our list is cramming in the beds. “The more rooms the better, because the rooms equal money,” explains Doug. “Say, for instance, you have a $150,000 dollar house. [With] 3.5% percent down, depending on taxes and insurance, your payment would be somewhere around a $1,000. So if you get a four-bedroom house, you could charge the other people and it'd cost you – what? – a hundred dollars to live in your house? And you own it? And you get the tax write-off? I mean, it's a no-brainer.” Makes sense to us!
2. Include Your Kid’s Name
Next, look into a Federal Housing Authority loan, and include your kid's name on the paperwork. “It's great. You can cosign for your son or daughter,” shares Doug. “You can get an FHA loan, and they can go with 3.5% down, and start building your son or daughter's credit.” Of course, the terms will depend on your own credit-worthiness.
3. Flip the Property
Finally, when your son or daughter gets that diploma, flip the property. Doug says you can still make a profit in that four to five-year span – and you won’t even have to pay taxes on the appreciation.
Now, you should know that nothing's foolproof. Housing markets can crash, but you do have the option to keep renting while you wait for a recovery. And Doug has one last warning: “You're gonna want to probably check on that property, [and] make sure they're not destroying it. Because back in the day, there were a few of my buddies who did kind of do a number on their house.” Yikes!
So consider ditching the dorm!
Do YOU have any college cost hacks to share? Sound off on our Facebook page @TheListShowTV.