Parents Of FSU Students Look At Real Estate

Posted by Joe Manausa on Thursday, July 22nd, 2010 at 11:08am.

The average parent of an FSU student spends about $20K each year towards the cost of their child attending FSU, but smart parents pay much less!

FSU student housing solutionsHistorically, parents of FSU students have looked at real estate ownership as a method of reducing or eliminating the cost of sending their child to college for five (or so) years. As investment properties skyrocketed during the boom of the housing market though, we saw less and less investment as the opportunity for safety was diminished.

Now that it is six years later, I am starting to see more and more parents want to talk about how buying a home for an FSU student actually helps them defer the cost of sending their child to school. I figured it would make for a good blog post for all of those potential investors, but also an educational piece for parents who are trying to figure out how to pay for college for their children.

Sending A Child To College

It is estimated that the average parent spends about $20K each year towards the cost of their child attending a State University here in Florida. Obviously, with room, entertainment, board, entertainment, tuition, entertainment, books, entertainment and the other costs of being a young college student going up, parents are looking for a way to help pay for it all.

Using Real Estate To Defer The Cost Of College In Florida

Ever since I started in real estate in the early 1990s, I have worked with parents who learned how to offset the non-tax-benefit costs of education with the tax-benefit costs of real estate ownership. So, how does this work?

In a nutshell, the parents of FSU students will buy a larger rental home for their child. The child will arrange for several friends to move in to offset the rental costs. The parents will pay the child a management fee (deductible) for the help keeping the home rented. The parents and child will enter into an arrangement for the child to take care of maintenance in return for part of the profit at the sale of the house.

For those readers who would like to see more detail on the "numbers" side of this, you can view a blog about investing in student rentals by following this link.

The key to understanding why this simple strategy saves money is understanding how our tax laws work. Since sending money to your child is not tax deductible for schooling, it is better to own a property and "lose" money to your child then to just send it to them tax free. If you are a parent of a college student, you really should explore this in greater detail.

For those interested, I can arrange for a meeting to include a local accountant who understands this portion of the Federal Income Tax laws and procedures. If you have interest in such a meeting, you can let me know below.

How Can We Help You With Your Student Housing?

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Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.

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