my kids are going to college in 3-4 years, is investing on a second home good to pay for their college expense

Answer 1

If you are planning on investing for a few years and then selling the house to pay for their education, then it is a crazy idea. Many experts feel that there is a housing bubble that is just about to burst, so you may end up buying high ans selling low.

If you are looking at investment property, then it depends where you live. The housing bubble is not everywhere -- but housing in major cities on the East or West coast is very high, and likely to drop soon. If you are going to rely on income from the home, make sure that you will have enough income to pay for their educations. Homes are often money pits.

If you are particularly handy, it could turn out to be a good investment. Buying slightly distressed properties, fixing them up and selling them quickly can be profitable -- if you are able to fix them up cheaply (or yourself).

Answer 2

I am assuming that you expecting to sell your property at a profit and then send them to college with that money.

First, 3-4 years is not a long period of time for the properties to appreciate. Don't know where you live (which city/country?). There are too many closing costs involved (including real estate agents) that can be recovered in a 4 year period.

Check the property appreciation figures in the area you are considering. Typically it would 5-10% at most. Then factor in how you are going to pay for this - mortgage or cash? Can you rent it out? If so, how much can you get? Don't forget the property taxes also.

I am simply writing down all the factors to consider and not a comprehensive response to your exact situation.

Answer 3

certainly the two the solutions right here have very valid factors. you're difficulty is surprisingly complicated and you will intend to ensure you're making the main suitable suited decision. you will could take each and every thing under consideration. merely shop in mind that in case you get a 2d loan you could finally end up owing better than the home is nicely worth. in case you get right into a financial bind after that merchandising your place won't even supply help to. you will could motel to working up your credit playing cards all over again. the two way i'd decrease the playing cards up till you have the balances below administration or repay the 2d loan. One approach in case you be sure to easily pay down the playing cards is to prioritize them with smallest balances with optimum expenses of interest first. Pay the minimum on all of them yet on extensive style a million pay as much as you could. try this till it relatively is paid off. Then take the money you have been paying #a million with and prepare it to #2 and pay the minimum at something etc. this can provide you a set budget for the playing cards to artwork with yet additionally specializes in paying the playing cards that would gets a commission off the quickest or the costliest in terms of interest first. in the previous you comprehend it you will make a huge dent in it. in case you are trying it this way you will constantly have that 2d mortagage that could be useful you out of a jam.

Answer 4

Probably not the wisest thing to do. The time period is too short and there are too many costs associated with a home. Insurance, taxes, mortgage interest, upkeep. There is also the fact that the previous low interest rates drove the prices of homes through the roof. The bubble is ready to burst.

Answer 5

I would advise against it because the housing market is already slowing down and most likely will continue to slow in the next few years. Unless you're talking about some fantastic waterfront property in a nice area, you may not realize the returns you expect in the short run, esp not if you add the cost of buying, selling, repair, taxes, etc. in.

Answer 6

Is this home for them, or for rental? If either of them then yes. If you're buying a new home just to have it.. no. My boyfriends parents have done this. Many of my friends parents' bought them homes to live in while away for school and charged their roommates to cover what they put into it. Very wise idea.

Answer 7

Please clarify which city you are referring to. The answer depends on the location.