Pay for College with Investment Properties

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Have you thought about using Colorado Springs real estate to finance your child or grandchild’s college fund?

With today’s market, you can purchase a home in Colorado Springs at a great price and finance that home with record low interest rates.

Historically, real estate in Colorado Springs has appreciated at an average of 6%. When you go to sell that property in 18 years, just as the child is heading off to college, the home should more than double in value. For example, if you purchased a home today for $200,000, theoretically, that home should be worth $538,554 in 18 years at 6% appreciation.

Even if the Colorado Springs property only appreciated at a 4% rate, it would be valued at $389,580.

Ideally, you would purchase the property in Colorado Springs and rent it out for a positive cash flow, thus the renters would be paying down the mortgage. So, if you took out a 30 year mortgage at 5.0% and financed 80% of the original value, the remaining loan balance after 18 years would be $ 92,394. At an average of 4% appreciation (worst case scenario), the profit would be $297,186. At an average of 6% appreciation, the profit would be approximately $446,160.

So essentially, you could grow your initial investment of $40,000 (20% down) by $250,000 to $400,000 in 18 years.Is the traditional college fund growing that fast today?

By putting the monthly positive cash flow into the bank, you could grow the college fund or pay off the mortgage that much quicker, creating a greater return.

Just something to ponder…