Buying Where Students Live

Students and parents looking for student housing are considering buying rather than renting. Parents of students are investing in college and university housing to off-set a portion, if not all, of their child’s college tuition, with an eye toward renting out part of it to other college students. Investing around universities and colleges brings a steady cash flow combined with a low vacancy rate.

To help you purchase this type of student housing, the Federal Housing Administration offers something called a ‘kiddie condo loan’. This loan helps you purchase a property for your own children while they attend college. The loan offers three main benefits: a low down payment, a lower, owner-occupied interest rate on the mortgage, as opposed to the higher investment property interest rate, and it helps a student to establish credit.

The Federal Housing Administration, FHA, endorses the “Kiddie Condo” loan program as an economical approach to student housing. According to its Web site, “this type of mortgage allows a person to co-borrow with a blood relative (e. g. parent, grandparent, sibling, etc.) who helps qualify for the loan using their income or assets.” Log onto to read more about this loan.

Kiddie Condo Loan:
This loan program is designed to allow both students and non-students to purchase a home with a blood-relative’s good credit standing and cash, according to MSNBC. These homes qualify for all tax advantages of a primary residence and require only 3 percent down. The owner-child can build a positive credit history as they escape from university dorm life.

According to the FAA Web site, one stipulation for this type of loan is that at least one borrower must occupy the property as a primary residence, but the extra bedrooms can be rented out to reduce the cost of the mortgage. Furthermore, the tax benefits can be divided among the owners.

Top reasons for buying this type of property:

To potentially feather your own nest through home appreciation and rental income.

To cut down on your student’s room and board costs.

Buying a property is a great alternative to university housing and rentals. Rental housing that is close to campus is scarce in San Diego.

According to Terri Cullen of The Wall Street Journal Online, “Is this a Good time to Invest in Real Estate?”, appreciation and rental income over the past 20 years has been around 12%, according to the National Council of Real Estate Investment Fiduciaries, an industry trade group in Chicago. That compared with an average annual return of about 9.5% for stocks and 5.1% for bonds, found in a recent study by the National Center for Policy Analysis, a public policy research group in Washington, D.C.

In 2006, Newsweek magazine dubbed UCSD as “Hottest for Science” in its review of “America’s 25 Hottest Colleges”. UCSD School of Medicine ranked Number 14 among all US colleges and universities for medical research and 22 for primary care. Jacob School of Engineering is number 11 overall and number 6 among public universities.

There is a constant demand for housing in college and university towns and cities, regardless of the economy. Kids go to college every year and will need a place to live. Room and board at a four year college can run up to $10,000 and more per year, with the cost rising an estimated 5 % annually. So why not apply that towards a mortgage?

About Denay Trinidad

Real Estate is my passion and I hope to have the opportunity to help you sell or purchase Real Estate. You will benefit from my exceptional knowledge of the local market and my focus on finding buyers the perfect property or netting sellers the right price and in the right amount of time. As a Certified Previews International Specialist, I am very qualified to sell properties that fall under the Luxury market. Much of my business is from friends or referrals. I am loyal to my clients throughout the entire process, and remain loyal long after escrow has closed. I would love the opportunity to meet with you and help you find your dream home, investment or Sell your home with all of the creativity, determination and experience I have. Thank you!
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