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Bob Henry Maucione
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metrowide123@gmail.com
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Bob Henry Maucione
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Recently published in Frederick's Child Magazine 


How To Pay For College: Buy Real Estate, Rent It
Bob Henry Maucione

Start now while your child is young and time is on your side.

As parents, we love our children and want the best for their future. A college education is a goal for many. However, college is expensive, very expensive.

It's no wonder parents are in a state of financial shock and awe at today's cost to obtain a college degree. Tuition and living expenses at a state university for four years is about $80,000 and many private colleges can reach $200,000. Expect costs to rise in the years ahead faster than the inflation rate. If that isn't enough anxiety, the average debt for graduating college students is about $26,000.

Saving money for your child's future education is a challenge given the present economic environment and competing needs like saving for retirement and the increasing costs of living. College 529 plans, stocks, bonds, certificates of deposit and bank saving accounts are all popular saving choices, but seem unable to produce the returns necessary to cover upcoming and rising college costs. It's no wonder parents of young children feel frustrated, stuck and bewildered to find a better way to save for their child's future education.

My wife and I experienced the same investment frustration when our son started pre-school. As he entered first grade, we continued to save for his future education, but the returns were dismal at best. There had to be a better way. Fortunately, I remembered meeting a fireman from Boston years ago who invested in rental real estate on Cape Cod to help pay for educating his six children. The fireman believed in owning real estate because it was an investment he and his wife could easily understand, an asset they could "see and touch," a plan where the couple could make their own decisions and control their own money.

"Bob," he said, "on a fireman's salary, it's just impossible to save enough for my children's future college education that my wife and I feel they deserve and need to start a good life." He went on to say that his real estate plan to accumulate wealth was simple and worked well with the rental properties he and his wife acquired. I was grateful for the Boston fireman's advice. It inspired my wife and I to implement a similar plan that helped us pay for our son's college education.

The idea is simple enough. Acquire a rental property with a low down payment and get a 15- year fixed loan for the balance. Tenant rent can cover the payment of principal, interest, taxes, insurance and expenses.

What happens next is amazing. Over time, tenant rent builds up owner equity and pays off the loan. Any property appreciation is "gravy equity" to the property owner. By the time your kindergartner becomes a high school senior, you will have an asset that can help pay for a college education.

The concept is a long-term investment. No gimmicks. No flipping. No guaranteed appreciation. Just old-fashioned real estate basics; slow and easy equity wealth-building using "other people's money" (bank loan and tenant rent) along with your down payment. It's a "no brainer" for those willing to implement an easy to understand plan.

Sure, there is a commitment of time, a small down payment, and probably a strong willingness to overcome a bit of investment fear. But every investment is inherent with those characteristics along with benefits and risks.

A real estate investment has many benefits: leverage, equity building, tax advantages, inflation hedge, potential appreciation and the psychological security of owning an asset you control. The risks can be diminished by becoming informed and working with competent real estate professionals who can help you succeed.

What is most important is finding the right rental property, at the right price, in the right location. Finding the right property where you can afford to buy and tenant rent that can cover the mortgage and expenses is the secret. People have been successfully investing in real estate for a long time. You can too, if you start now while your child is young and time is on your side. Buy real estate, rent it. You'll be glad you did. ® 

Bob Henry Maucione is a licensed, real estate broker and certified, appraiser with Metro-Wide Realty, Inc., a veteran owned company. Bob conducts free seminars on real estate investing.
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