Get Ready for College...


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One of the important things as a parent is to plan for their children’s education. Let’s look at two different approaches: a savings account or investing in rental real estate. 


Assuming your child is five years old and you start putting $250 a month in a savings account earning 2%, in 13 years you’d have $44,497.41 to pay for their college. Anticipating that isn’t going to be enough, you’d have to save $500 a month to end up with $88,995.

Another way would be to make a lump sum contribution of $20,000 today in a mutual fund earning 5% that would be worth $37,713 in 13 years. You’d have to make a $47,196 initial contribution to end up with the same $88,995.

An alternative to savings would be to invest in a $100,000 home in a good area. Assuming a three percent appreciation and rent of $1,000 a month, an initial investment of $23,500 could have a future wealth position of $83,838 at the end of 13 years.

Obviously, this is just an example of why rental homes are the Great investment providing Income, Depreciation, Equity build-up, Appreciation and Leverage. While rentals certainly have more risk and management than a savings account, they do provide an opportunity for a higher rate of return. 

I have several clients who are doing the investment properties approach.  They are using it as a way for the children to help with the investments.  Having them get involved in the process between tenants. Learning about the responsiblity and using it as a part time job - for saving for college and more!  It's a unique approach for college savings!! 

If you’re concerned about paying for college tuition in the future, it is certainly worth investigating the possibility of investing in rental homes today.


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It's easy to save one of the above searches so that you can get regular update or create a home search with your own criteria!  The Cindy D Team is always willing to help and will always respect your privacy!  We're here to help educate you so that you can make a good decision!  Contact us with any of your real estate questions about homes in the Johnson County area!  We also can help you put together a strategy or discuss the pro's and con's of investment properties!  Call us today!

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