(Originally Published September 5th, 2012)
If you’ve got a child getting out of the dorms at CSU and looking for affordable rental housing, chances are pickings are super slim right now. Vacancy rates are less than 2% and affordable housing is in very low supply. The good news is there is a great opportunity for you to own investment property in Fort Collins.. The option of buying a home for your college student (and their friends) makes good financial sense right now and could be a very practical opportunity for you and your student. If you want to own investment property in Fort Collins for your student to live in and enjoy, take advantage of these strategies:
Better Financial Terms
When buying with your student, you can take advantage of better interest rates if you include them on the loan and title. By including them, the property will be classified as “owner occupied” which typically results in lower interest rates than “investment properties”. The difference in rate might not really affect you in the short term, but over a 30 year term, the extra .5%- .75% can really add up. If your student is on title, you’re able to transfer the entire title to them post graduation, or sell the home and give your student the built up equity as a graduation present.
Your Student’s Creditworthiness
College students have a tough time getting credit after college with mounting student loans, credit card debt and other consumer debt. Home ownership and investment is a fantastic way to build credit as long as the mortgage is paid on time and in full every month. Utilize consistent payments to build your student’s credit, and they’ll reap the benefits when making purchases after college.
Home ownership has some of the best tax advantages during ownership and at the eventual sale. Being able to write off mortgage interest and property taxes adds up to tons of savings. On top of that primary residences are exempt from taxes (up to $250k single/$500k married). When your home appreciates, your student is likely free from capital gains as an owner occupant, which wouldn’t be the case if it was purchased as an investment.
If you’re looking for investment property in Fort Collins, contact us, we’d love to help you understand the strategies you can utilize when buying with your student.
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