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Public universities have raised pricing even faster, at 133%.
Whats a parent to do, if they want to help their kids with the soaring cost of college?
Start early and get creative, thats what.
Consider a quick example.
Ingrid Investor buys a rental property for $360,000, the year her son is born.
If she took out a 15-year mortgage, shed now own the property free and clear.
She could take out anentirely new mortgage, which at 80% loan-to-value would give her $583,435.
Her tenants could then pay down the mortgage for her all over again.
Imagine Ingrid used this approach instead.
And that says nothing of the enormous headaches of becoming a landlord.
I should know I used to use this strategy myself.
Today, I only invest passively in real estate.
And I can still take advantage of asimilar investing modeltargeting infinite returns.
Hands-off investors can put money toward real estate projects called syndications.
Limited partners keep their ownership interest in the property, however.
They also learn the concept of leverage: paying for assets with other peoples money.
That could include renting bedrooms, other units, or accessory dwelling units (ADUs).
To qualify for an owner-occupied mortgage, you have to move into the property.
You or your grown child, whose name also appears on the deed.
Imagine you and your college kid buy an off-campus house with four bedrooms.
Your child moves in and rents out the other three bedrooms to buddies.
Their rent covers the mortgage payment and your child scores free housing.
And if you opt for the Roth option, your investments compound tax-free.
You recycle that same $50,000 into a similar investment.
Thats the power of compounding especially tax-free.
You dont need to be rich to help your kids with college.
But it does help to start when theyre young and to get creative.
Learn the more obscure rules of the game, and youll find yourself winning in no time.
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