Finance Your Child's College and Add to Your Own Bottom Line

Are you interested in finding a way to help finance your child's college education? Presented here is one solution and as with any financial advice, it is recommended you do your homework. Some look at this solution as a short-term investment; however, you can make a little go a long way. Numerous parents, grandparents or guardians have successfully applied this solution to offset the high cost of college as well as a supplement to their own bottom line. This is NOT a get rich scheme, and you are not guaranteed to be fabulously wealthy. You can, however secure a solid residual income with little or no cash outlay. Here's how...

Some of the most common ways to finance a child's' college costs include applying for grants, scholarships and loans. While these tried and true methods have become the mainstay in traditional college financing, a little used method is easing it's way into a wide open market. Aside from tuition and books, perhaps the most costly college expenses is the dorm room. Recognizing that most colleges require Freshmen students to live in the dorm during the first year of college, provides you the financier with time to consider becoming a Temporary Landlord.

DISCLAIMER: Prior to initiating or finalizing any financial agreements, you are strongly encouraged to seek out the advice of a lawyer skilled in property management, as well as a Realtor experienced in rental property. There may be some costs associated with such advice, but it is always best to pay now, than to pay later.

Once you've settled on the choice of college for your son or daughter, spend some time on the Internet examining multi-bedroom homes for sale within proximity of college. The "For Sale By Owner" sites often offers some of the lowest prices, but if it's convenience you want, then you should seek the advice of a professional Realtor or property manager.

Next you should visit the area and drive and walk the neighborhood. Remember that if you visit during the summer to consider road conditions and overall maintenance and upkeep during the winter. By actually putting your feet on the ground that you're considering you can establish the rhythm and dynamics of the area. Get a feel for the ebb and flow of the college population, both faculty and students. You'll also be able to learn what the going rate for rent in the area is, as well as what the 'market' will stand.

Once you've completed this research, you may opt to get into a three or four bedroom home. When considering how many rooms to seek simply divide the cost of the monthly house payments by 2 or 3 respectively. In this way you can afford to "rent" 2 or three rooms to other student, typically at a much reduced rate than their dorm costs. You can arrange it so that your student actually earns his room and board by maintaining the house and general upkeep. In this way you are empowering them and allowing them to take some responsibility for their success, without bearing the full brunt of ownership.

Some Keys To Success:

1. Select a house in good repair, but preferably not brand new. This will reduce the cost for the residence and lower your personal qualms about fair wear and tear.

2. The neighborhood should be one that is convenient for college living, with amenities withing walking or biking distance. The proximity of bookstores, cafe's, parks, fast food, and other necessities will increase the appeal to perspective renters. The availability of public transportation is also a plus when available.

3. Before signing anything, discuss the rental agreements, security and other deposits with a lawyer. Having all the documents legally required and expertly reviewed will save much grief and bitter dissension later.

4. Review the terms of agreement with the bank to ensure it is legal to convert a single family dwelling in that neighborhood into a multi-person rental. There may be covenants within the residential community which prohibit such enterprises, but often those can be amended or statements of understanding can be produced by a lawyer to overcome such issues.

5. Carefully screen and select tenants. This may require meeting with the parents of perspective students and having them co-sign the lease/rental agreement. Some parents would prefer to have their student reside off-campus, and not in a fraternity or sorority. This may also involve deciding whether to rent to one gender or making your rental co-ed. Discussions regarding damages, late payments, and breaking the lease should also be conducted.

CAUTION:Liability for actions which occur on the premises of your property may not be fully waived by you the owner. Tenant selection will go a long way toward your peace of mind. All legally binding agreements should be notarized and copies provided to all effected parties.

This introduction to financing your child's tuition by becoming a temporary landlord is not all encompassing. There are several other important areas that should be addressed before you embark on this venture. It is hoped that this short introduction will spark the idea that there are other ways of gaining funds for college beyond hoping for a grant or scholarship.