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Originally posted by Joan.of.the.Arch
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Hope no one minds my bringing this post back up.
Timetosave, today it ocurred to me that our worlds have another parallel--besides the fact that we both have kids who want a college education and both our kids have parents who work at a college and therefor might get free or reduced tuition. Guess what! I am looking at our current contributions to retirement savings because I am investigating the possibility of buying a very inexpensive house next to a college campus! It is my son who came up with this idea. He is signing a contract to rent, but is aware that the owner wishes to sell. He started working on some of the math before he contacted me to bring up the idea. (That college education is already paying off.
Math is his minor. 
)
But what are some differences between our situations?
Well, we would not be looking to make a profit on the house, should we buy it. We are merely hoping to actually spend less in the end by doing this. Son would occupy the house and do upkeep. He'd be there everyday to tend to things, rather than us having to find it in a mess everytime the last round of renters leaves. He would be the landlord, renting a room to other students--he already has two who are going to sublet from him under the current landlord. We do not want rental property in a town where we don't live after our son's college years, so we could resell when he is finished there. We would not plan on a profit; if it happens, great; if not, at least we figure we will not have lost anything and in fact will have come out ahead by keeping the would-be rent money in the family.
We are, of course, looking into financing. No question that we could get bank financing for a second home of eight times the value of this little house! We have good income, excellent credit, little debt, and live below our means, currently saving 28% of income. So one of the things we are looking at is slowing our retirement contributrions. But we are not considering cashing out the retirement accounts! That would be a big loss. (And did you know, timetosave, that some retirement savings accounts are protected in a bankruptcy? You seem to have lived very close to the edge, so I thought you would want to know that your retirement money might not be given to creditors should you find yourself in bankruptcy.)
Though I think my family with three adults is far more able to afford this college town second property than your family could, I am not yet convinced that it is a wise thing to do. I have to weigh many options and factor in some uncertainties. A chief concern is how the slowdown in retirement contributions would change our bottomline 20 years from now, and how soon we could re-up the contribution. It is an idea to think through very thoroughly and to make sure everything is really covered, that even in the worst case scenarios we can handle the our obligations.
Again, hang in there with your commitment to pay your debts and to find increased income if necessary. In your position I would have so much anxiety, so I really feel for you. Stay on the frugal wagon and you can eventually come out ahead.
Timetosave, today it ocurred to me that our worlds have another parallel--besides the fact that we both have kids who want a college education and both our kids have parents who work at a college and therefor might get free or reduced tuition. Guess what! I am looking at our current contributions to retirement savings because I am investigating the possibility of buying a very inexpensive house next to a college campus! It is my son who came up with this idea. He is signing a contract to rent, but is aware that the owner wishes to sell. He started working on some of the math before he contacted me to bring up the idea. (That college education is already paying off.
Math is his minor. )But what are some differences between our situations?
Well, we would not be looking to make a profit on the house, should we buy it. We are merely hoping to actually spend less in the end by doing this. Son would occupy the house and do upkeep. He'd be there everyday to tend to things, rather than us having to find it in a mess everytime the last round of renters leaves. He would be the landlord, renting a room to other students--he already has two who are going to sublet from him under the current landlord. We do not want rental property in a town where we don't live after our son's college years, so we could resell when he is finished there. We would not plan on a profit; if it happens, great; if not, at least we figure we will not have lost anything and in fact will have come out ahead by keeping the would-be rent money in the family.
We are, of course, looking into financing. No question that we could get bank financing for a second home of eight times the value of this little house! We have good income, excellent credit, little debt, and live below our means, currently saving 28% of income. So one of the things we are looking at is slowing our retirement contributrions. But we are not considering cashing out the retirement accounts! That would be a big loss. (And did you know, timetosave, that some retirement savings accounts are protected in a bankruptcy? You seem to have lived very close to the edge, so I thought you would want to know that your retirement money might not be given to creditors should you find yourself in bankruptcy.)
Though I think my family with three adults is far more able to afford this college town second property than your family could, I am not yet convinced that it is a wise thing to do. I have to weigh many options and factor in some uncertainties. A chief concern is how the slowdown in retirement contributions would change our bottomline 20 years from now, and how soon we could re-up the contribution. It is an idea to think through very thoroughly and to make sure everything is really covered, that even in the worst case scenarios we can handle the our obligations.
Again, hang in there with your commitment to pay your debts and to find increased income if necessary. In your position I would have so much anxiety, so I really feel for you. Stay on the frugal wagon and you can eventually come out ahead.
I see several advantages of this:
1) tenants are plentiful
2) tenants have "low demands". Not worried about school buses for kids or other factors in "quality of living".
3) old friges make for good kegerators
4) tenants often will not be in house for 1-2 months, which can allow for maintainance to unit.
5) leases could be renewed for 3 year periods (sophomore-senior years).
6) buy cheap used furniture and you can increase rent to "furnished" unit prices.
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