The Classic Investment Idea

Few weeks back, when Stanford held its graduation for class of 2007, my girl friend from high school, Shiao-Juan brought all her family from Pittsburg to join her daughter, Christina of this momentum of her life. She then disclosed to me, after a careful consideration, she and her husband decided to buy an investment property in Cleveland, Ohio for their eldest son, while he pursuing his master studies.

I embraced her with the decision, although I wished they had adopted my suggestion when Christina is here, they would have enjoyed more than doubled investment return from 2003.

Lots of middle-aged parents put their bets down at a college town while their children go to school. According to NAR (National Association of Realtors) statistics,  during our historical interest rate bottomed time (2001-2003), more than 50% people used equity to buy second homes. And 1/3 of these homes were for purchase of a college locations.

A classic, no-fail investment strategy. For college town investment, not only provide endless cash flow month by month, there’s less worry of empty unit than regular investment properties, but also less maintenance burden while owner (children is onsite) – if they don’t hold parties every weekend and damage the property, that is!

Moreover, the investment is not just limited to only 4-year while your children is physically at the site. After their graduation, one can still keep it. One can hire a local Realtor to manage it with a minimum fee. When time comes to make a decision to sell, there are several options, a 1031 exchange, buy a higher or equal value liked property, with a deferred tax benefit. Or taking advange of $500,00o, for married couple, ($250,000 for single person) of income tax capital gain examption. Like hundreads of parents they’ve already enjoyed sweet results of this from a wise decision.

It’s never late for an investment idea and action like this!

Please contact me if you have any questions.



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