Advanced Strategy: A free college degree!
Advanced Strategy: A free college degree!
John Schaub, a bright investor and instructor that also started investing right out of college, pointed out this great idea…
If your child is going to college away from home, buy a house for them in their name. They can rent out rooms to break even. But the twist on this old idea is that when they sell, if they have lived there two out of five years, they can sell and the profits on their residence are not taxed. If you get appreciation greater than tuition, then the degree is FREE!
Here is another spin in this great idea: set up an open second mortgage and as you advance them money, it will be secured and will have to be paid back at the time of sale. (You wouldn’t want to spoil them by gifting them the education, would you?) You can always forgive the note if the property does not go up enough… then again, if you are helping them buy it, shouldn’t you get a good enough deal that there is some built in profit from the beginning?
