Plan for Buying a House by a Student

It seems like every expense for students, including tuition and housing, is on the rise these days. No Canadian demographic is better able to weather price hikes than students. Students and their families are scrambling to find creative solutions to the rising expense of higher education.
You can put off paying for some of these expenses by taking out student loans, but you'll have to pay them back once you graduate. Having $30,000 in debt before landing your first job makes it hard to advance in your career or in life generally.

Additional excellent options for student support include bursaries, grants, and scholarships. Nevertheless, the available funds are decreasing, and the rivalry for these funds is becoming fiercer annually.
After factoring in books and fees, the average student spends more than $16,000 for a bachelor's degree. A four-year degree will set you back around $38,000 in housing costs. Rent of $800/month for 48 months is the basis for this.
Even before factoring in living costs like food, clothing, and entertainment, the sum total of a student's education exceeds $54,000. If you want to go to college, you'll need more than $18,000 over the course of four years. This is because the typical student can only get student loans for up to $9,000 per year. Expenses for necessities like food and clothing can add up.
How can a student succeed academically without taking out large loans and yet obtaining degree?
The real estate market has recently attracted the attention of many parents looking for a way out. Allow me to elucidate their actions...
As soon as their first child starts college, the parents buy a little house close to campus. I prefer a home with more bedrooms! For both the pupils and their parents, this means a world of possibilities.
First, the parents will have equity in the property, which they can utilize to pay off school loans or put toward other personal expenses if the value of the house continues to rise.
Secondly, the student is building equity in the house by paying off the mortgage with the money they would have spent to a landlord or dorm.
Furthermore, the home offers fantastic tax savings due to its status as a rental property. It is possible to deduct any mortgage interest paid. You can claim maintenance and renovations, taxes, and utilities as tax deductible expenses.
As a fourth point, more tenants may be interested. Imagine spending around $150,000 on a three-bedroom cottage. Assuming a 5% down payment and a 25-year mortgage rate of 5.5%, the total cost of the loan would be around $900. Right present, a typical one-bedroom apartment close to the University of Alberta costs around the same as that, plus or minus $100.
Your child has found two people to live with and split the bills. The renters save $200/month compared to apartment rental because they each pay you $600/month. Quite a bargain for them!
The house generates a total of $1200 in monthly earnings for you. Your kid gets to live in your house for free and gets $300 a month to use anyway they choose. Your youngster no longer has to choose between going to school and working.
Imagine if you finished the basement and added two more bedrooms to your home. You could "clear" $1,500 monthly or, in other words, your income would be effectively quadrupled. Your child will get $500 monthly for living expenses and an extra $12,000 per year ($100 per month) to cover university expenditures including tuition, books, and other miscellaneous costs.
Let's take a second look at this, this time with two families. Both the Smiths and the Joneses.
Steve Smith is sent to college for four years by his parents. During the academic year, he pays $800/month to live in a residence. About four thousand dollars will cover his education costs. The monthly budget for necessities like food, clothing, and entertainment is around $500. That works up to about $20,000 per year for Steve.
Half of this will be covered by student loans and scholarships (if Scott is eligible), therefore the other half will have to be paid for by him and his parents. To help defray some of the costs, Scott will need to secure part-time employment and, during the summers, work full-time.
Using their savings and a lot of hard work, the Smiths make it through a challenging four years. Scott will have to begin paying back his $30,000 to $35,000 in student debts as soon as he graduates. For the following decade, he will be responsible for that payment...
Looking at the Jones family now.
For their daughter Sally, the Joneses buy a house that is close to the school. They put $7,500 (or 5% of the purchase price) down on a $150,000 house. It houses three and a half bedrooms. In return for staying in one of the rooms and handling the other renters, they give their daughter $500 a month to pay her expenses and waive the rent. The monthly rent for each of the other four rooms is $600, and that price covers everything from utilities to laundry. Amazing offer for every student.
The total amount of rent collected from Sally's four housemates each month is $2,400. The $500 remains with her, while the remainder is deposited into a property-specific bank account. Monthly payments for the mortgage and taxes are deducted from the same account. With the mortgage of $900 and taxes of $200, the total cost was $1100. The property will have a profit of $800 at the end of the month. That sum is merely sitting there in the event of repairs, emergencies, or other unanticipated costs.
Keep in mind that Mr. and Mrs. Jones can deduct the mortgage interest and taxes from their taxable income at year's end.
There is $3,200 in the bank account at the conclusion of the first year (September to December), which is approximately half of the initial down payment. Since Sally hasn't had to work a job while attending school, she is overjoyed that they may utilize the money to cover her second semester tuition without taking out any student loans.
The property provides Mr. and Mrs. Jones with substantial tax benefits, and Sally is free from any responsibility for her poor academic performance, which makes everyone pleased.
The house will cover Sally's summer expenses so that she can participate in extracurricular activities or go on a trip. Perhaps she does nothing more than lay about the yard. The fact that she is exempt from working gives her more freedom.
The Joneses have earned $6,400 from the property by the beginning of September the following year, which is when Sally starts her second year at university. All of Sally's expenses for the upcoming semester have been covered, including her tuition, books, and housing. Throughout her tenure at university, the pattern persists.
After accounting for all costs, they had a cash profit of more than $20,000 after four years. The property's worth has probably gone up, and they've been making mortgage payments as well.
Sally is well prepared to enter the workforce, having never worked a day while in school and carrying zero debt. She leaps ahead in life because she doesn't have any debt.
Without having to worry about how she would pay for school, Sally was able to concentrate on her studies and graduate with honors. The Joneses put up a total of $7,500 for the down payment and another $2,000 for Sally's first semester of college.
Earnings of $35,000 in equity and cash. Is it any surprise that everyone is racing to be the next Jones?
It goes on from there, but...
The next step is for the Joneses to decide how to use the land. Is it for sale? Of course. After selling the house, they would have a nice profit. You should keep in mind that the mortgage has been paid off for the past four years, and the home's value has increased over that time as well.
But imagine they decide to hold on to the house and instead rent out the whole property to students. Their monthly income might reach $3,000 (or $1,900 after taxes and mortgages). That is, if the rental rate remains unchanged over the past four years.
The Joneses may choose a pair of Mercedes convertibles from www.mercedesbenz.ca and not pay a cent for them. The $1,900 in sales would cover the leases every month.
You deserve a couple of convertibles because you are such wonderful parents and because you paid for your child's entire schooling.

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