Greetings from Lexington, Kentucky!! Recently, I had a closing with my client Meghan pictured below. She is soon starting Pharmacy school at the University of Kentucky. I enjoyed working with her and her family and helped Meghan land just the perfect home with an easy commute to campus.
(Meghan & I at her closing)
During the summer months, I work with several college age students and their families. Many families are interested in purchasing a home for their college or graduate school student instead of having them rent or live in the dorm for 4 years.
Think about it, renting costs thousands of dollars over 4 years. What if you took that money and invested into a condo or home? You might just start building your nest egg before graduation. With rates at an all time low (I’ve even seen them as low as 3.75%) it makes perfect sense to invest. Real estate prices are good and there are many bargains are out there. In fact, The Wall Street Journal just named Lexington, Kentucky one of the Top 10 best cities for investing in real estate. Nobody knows money and finances like The Wall Street Journal does.
As good as owning a place sounds, with anything there are risks to consider:
1. It is a good ideal to own the place for 4 years or more in order to try to maximum the appreciation. If you will be staying in the home less than 3 years, you may not be giving the home time to appreciate. If your student is attending university then graduate school in the same city, it truly is a no-brainer that buying is the right move.
2. Neighborhoods that cater to college students will probably have less appreciation than more stable neighborhoods. With many students populating a specific area, you are mixed in with rentals and those who don’t properly treat and maintain the homes, thus creating a less desirable neighborhood.
3. Will the cost of the loan, property taxes, homeowners insurance, maintenance costs and homeowners association fees offset the dues of what a rental payment may be? If I know anything about rentals here in Lexington, I do know that you can pick up a nice home for a lot less than what one would pay in monthly rent fees on an apartment.
If you find the benefits of owning outweigh the risk, I will help you and your student find just the right place to call home. Also, think about the loan options. If you want your student to have title to the property, the minimum loan requirement is with FHA financing and you can secure a property with 3.5% down. I also do know of a local bank here in Lexington, KY that has a program where the borrower puts down as little as $500.00 and can obtain a fixed 30 year loan with no private mortgage insurance. Several of my first-time home buyers have used this program and it is truly an incredible deal.
Bottom line: if this is something you have considered or would like to discuss more in detail, I am always here to chat or meet with you. Together we can workup a personalized worksheet of pros and cons to see if this would be a benefit to you and your student. You may be surprised with our findings! Call me today!
Lexington KY is always #1 in my book! Whether you want to buy a downtown condo, a custom walkout ranch on a golf course, or a horse farm in the country, I can help find the perfect home for you – as well as help you sell your home. In addition to Lexington Real Estate, I specialize in the nearby towns of Paris, Midway, Georgetown, and Versailles.