College Students And Rental Properties
Bill has two grandsons in college, and both of them receive scholarships, financial aid, and have part-time jobs. Bill wonders if maybe they should be in a house or a condo.
QUESTION: Bill in Michigan has two grandsons in college, and both of them receive scholarships, financial aid, and have part-time jobs. Bill wonders if maybe they should be in a house or a condo. Dave says no because their lives are too chaotic as students.
ANSWER: No. Absolutely not. They need to rent something or get in the dorm. A college student doesn’t need to be an owner of real estate. They’ve got too many other things on their plates. They need to focus on graduating from college. When they get out of school, they’re going to be brothers who own something together, one of them gets married, the other one moves in and tears up the place, or they both head off to two corners of the world, and there sits a condo in Ann Arbor they can’t get rid of. That thing will be like a boat anchor around their necks.
If you want to buy a condo and own it and let them stay there or rent to them and be willing to rent it, they’re under no obligation to you once they’re out of school. I don’t want them trapped. Real estate is a wonderful investment, but it is a permanent investment. It drives a stake in the ground. Let’s not let the real estate thing become a burden to them. They just need a place to camp out. If you want to buy a condo and let them live there, that’s okay. There’s not a problem with that. But you need to see that as not a big investment. It’s more something you’re doing to help your grandsons. Later on, you can turn it into an investment and you’re not going to have them feeling guilty that somehow they move away after they graduate and somehow Grandpa gets messed up in that. You don’t want them on the hook for this at all. If it means that, then don’t buy it.