There's an air of excitement when your kids move out to study at college or university. It can however be very expensive! Purchasing an investment property for your child to live in and manage can be a great way to offset those expenses.
With interest rates at historic lows, it's a great time to finance an investment property but you'll still need to evaluate both the local market conditions and your long-term plans. It's important to determine whether you plan on renting it out after your child graduates as this will affect the rate of appreciation.
The idea is to cover the mortgage payments with the rent collected from roommates while your child manages and maintains the property. You'll have someone on site to cut the grass and perform other general types of maintenance as well as collect the rent. These chores can be performed in return for a reduction of their rent.
Ensure you thoroughly investigate the local real estate market and check out zoning laws regarding rentals. Specific purchasing details such as co-signing the mortgage or listing your child on title should be discussed with your financial planner and mortgage advisor. There are pros and cons to different ownership scenarios so you'll want to examine what makes sense for your individual situation.
Purchasing an investment property that's managed by your child is not a decision that should be taken lightly but it's certainly an option worth considering. Just make sure you do your homework so you're able to carefully weigh up the risks and rewards. When you crunch the numbers, you may well find that purchasing a campus crib makes great sense!
The Pearce Team
Let's discuss your next home sale or purchase, with no obligation.
11933 - 224th Street, Maple Ridge, B.C. V2X 6B2
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