If my kid is going to college, I am doing this.

I know far too many clients that want to help their kids get through school, but don't know how, when, or what to do. So they avoid it altogether until much later, at which point they join the Wishida Club. “I wishida done this” and “I wishida done that.” Now, I realize not everyone has the financial resources, and many struggle with making the distinction between giving their children everything and providing a helping hand. But for me, I lean into idea of providing enough rope to allow them to reach new heights, but not so much it could cause harm.

What does that look like? For the first year of college, I want my kid living in the dorms where they can get to know new people in similar circumstances. These are friendships that have the potential to withstand geography, economic reality, and decades of time. They learn to share milk, groceries, and space. Learn what it's like to do dishes, keep their place clean, and just how frustrating it can be when nobody pitches in. They learn self-regulation: when to go to bed and how much to study- healthy skills and habits for a kid to learn. In the dorms, they can figure out some basics without too many responsibilities.

What will I be doing during this time period? I will be shopping for an income property in the vicinity of campus. Too close and I may exceed my budget, too far and I can create a transportation problem. I prefer as many bedrooms as possible, probably excluding two bed homes. I want more bedrooms for my kid to rent out. Think economies of scale--more bedrooms don’t cost much more, but the rental value can be considerably higher, and I need to get enough rent to cover the mortgage payment. I'm not totally excluding a condo or townhouses; they usually have a lower price than SFR's. But I’d hold out for a three-bedroom minimum. The benefit of an HOA is they may offer a pool, community of young adults, and no landscaping to manage. But the downsides are potential shared walls, ceilings and floors, and a hefty homeowners monthly fee. I battled towing enforcement in college, expensive lessons to learn!

I plan to help my kid, but I don't want to provide everything. I was the first to attend college even though I wasn't the oldest child in my family. I felt like I was breaking new ground. I had little financial support; my parents didn’t have much. They lent me a car for my first year and a deposit for my shared apartment: three bedrooms, two bathrooms, six dudes. It was an absolute riot. I knew two of them and three quickly became friends. During the first semester break, we got three new roommates. It was a highlight to have this type of exposure and my roommate diversity was epic. I had one that ironed his jeans and one that taught me to unselfishly share food. I had one that was a serious thief (we all knew it was him) but we still liked his unmatched charisma.

I could not have duplicated these experiences living at home and commuting to school. I worked part time jobs during the school year and full-time jobs in the summers to save money and pay my bills, which included rent, food, dates, travel, tuition, books, car payment, insurance...all of it. I was truly independent and on my own. I knew many unemployed fellow students driving brand new SUV’s with all the time in the world to ‘make the grades.'  I may have resented my own circumstances at times, but I felt a fire burning within me to push on and move forward. I often consider how that struggle equipped me to manage a larger load once I graduated and began self-employment.

20 years later, my appetite to keep pushing still burns from those formative early struggles. Would I be where I am now if I had been handed the silver spoon during college? It's hard to know, but I’m grateful for the medicine I swallowed and how I responded to adversity. I don't want to rob my kids of a little character-building struggle.

Back to the house: year two, my kid moves in to the rental house, more specifically, in one of the rooms, probably sharing it. Not one time in my college experience did I have my own room. Not that I didn't want it. I simply couldn't afford it and I never believed it was all that important. I once had to convince a landlord to allow me a shared room when the entire building was single occupants. I could do math, and this saved me some cash and earned the landlord a little extra. Necessity can force convincing negotiations when you are told no.

Imagine the skills learned when my kid is renting the other rooms and acting as the house manager: collecting rent, signing leases, getting parental guarantees, dividing utilities, and sharing cleaning, etc. Navigating Boundaries and having difficult conversations are priceless skills, and they are never too young to learn these lessons. I can put the down payment on the property, hopefully co-signing with my kid for an owner occupant rate. Learning to budget, paying a mortgage, and collecting rent? These are important opportunities!

If my kid decides to transfer colleges or quit school, I’m not concerned. The model exists that students must live somewhere. Nearly a third of all properties are rentals. I'm just starting my kid out early and setting them up for success. Helping both of us. Sure, they will pay rent wherever they live, so they might as well reduce the principal and participate in the appreciation.

This plan may sound too perfect, as nothing ever goes exactly according to plan. But I'm okay with that, too. I bought my first home at 25 and had no clue what to do. I didn't know if I was going to live in it, rent it, what to remodel, etc.  I lacked a plan, a mentor, and advisor. I figured it out over time. But now, I am very intentional with my real estate and as a result, I’m thoroughly convinced that by helping my kid with a plan, everyone benefits. Passing on a skill and opening doors are fantastic ways to help them craft their future.

It is possible to do this much earlier than their first year of college. Shop the wholesale investor lists, foreclosures (if they ever come back) or keep an eye on the MLS to find the right property early. Collaborate with a Realtor that invests their own money in rentals. I will get far better advice and perspective in finding the right property by doing so. I will then find a property manager and rent it out, keeping it hot and ready for my kid to get old enough to take the reins. If they pick a different college, not to worry, I am still winning. I can always exchange it for something different, keep it rented, or add to my stable of investment properties. I've deeply regretted passing on certain properties and I’m haunted by their immense value today. The actor, Will Rogers, famously said, "Don't wait to buy real estate. Buy real estate and wait.”

How do I lose in this scenario? Appreciation seems to average about 4% annually so if my local market and property are average, my property will double in value in just shy of 20 years. It doesn’t take much to be above average if we have even the slightest bit of moxy. I can do this by buying a property that is below the median price, in an up-and-coming area, or one in need of repair and renovation. Returning a dysfunctional property to it’s best use is an easy way to create value.

This is how I put the odds in my favor. Is it scary? It can be. I won't lie, I shuddered at the final walk-through and nearly backed out of my first home purchase. However, a solid plan provides me confidence to reach out and help my kid in the best way I know how.

If my kid is going to college, I’m doing this.

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