As parents, our children need us more than ever. This goes beyond the ages of zero to eighteen; they will need us until the day we leave this Earth.
Why do our kids need us so much compared to yesteryear? The world has changed a lot over the past two decades.
Everything is more expensive, employers see no benefit in taking care of employees, and college and housing prices have risen much faster than wages.
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Tough choices ahead. We will have to make many tough choices as we move forward. Along those lines, we have to guide our children in the “best” direction sternly.
I didn’t say “right” direction because there is no right answer, only “good” choices that consider mental, emotional, and financial health.
One of these difficult decisions is whether to attend college or not. College is beyond expensive for the average student and family.
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As parents sign up for expensive loans and children use credit cards, is there a better way to fund our lifestyles?
College or bust. Society has pushed college onto every student that graduates high school. Worse, parents are buying into college programming even more than kids.
However, attending college is only for some. Today, we have more options than ever to make a good living directly out of high school.
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Even better, we can take classes at the community college or online while we work. Why do we need to go into debt to get a degree at age 22?
It’s time for parents to start thinking outside the box regarding college. We must first educate ourselves (read “Debt-Free Degree”), then assist our children in making good decisions.
Real estate all the way. We can best help our children by setting aside property for them as soon as possible.
No, I am not talking about leaving them your home in your will. Getting a home in their 60s and 70s is excellent, but I am talking about much sooner.
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We should buy property for our children as soon as they are born. It will be challenging, but investing in a home will have much greater implications than a college degree.
I wrote an entire series on how to use real estate to pay for college. Owning real estate leverages time (and compounding) to our advantage to get our children ahead.
- Pay for College with Real Estate 101: Real Estate vs. 529 Plan
- Pay for College with Real Estate 102: Buy a House, Sell a House
- Pay for College with Real Estate 103: Leverage Home Equity Loans
- Pay for College with Real Estate 104: Cash-Out Refinance
- Pay for College with Real Estate 105: Rental Wins
Is it difficult to own multiple properties? It sure is. However, nothing is more worth the pain than gifting your child a house at a very young age.
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My own situation. I own three houses together with my wife. Let’s take house #2 as an example.
The mortgage is $1,200/month, and today it can rent for $2,200. My oldest son will graduate high school in 2.5 years.
Upon graduation, he will have numerous options for leveraging this home to his advantage. He can choose what’s best for him while keeping his options open as things change.
- He can live in the home and get roommates. He can collect at least $2,000/month in rental income from 2-3 roommates. He would live for free while earning vast amounts of rental income.
- He can stay with us (in House #3) and collect the other home’s $1,000/month in passive rental income. He can use this money to pay for an online school or community college.
- He can do a variation of living with roommates, going to school, and working a job.
The more options, the better. As you can see, there are many ways to leverage real estate. My son can even take a home equity loan to buy another house.
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What options will my son have with only a college degree? He would need to find a job and pay down his student loans.
Then, he would need to save a large lump sum for a house down payment. All this while starting a family, saving for retirement, having children, and building a career.
Yes, we are setting our children up for failure. It’s nearly impossible for our kids to accomplish all these things in one lifetime.
By buying them home early, we give them an additional lifetime (or two), so they can focus on keeping their marriage together and being happy.
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The additional strain of owning multiple homes. It takes financial sophistication to own multiple homes, so we need patience. We must see the “long game.”
My wife and I struggled to keep our first house because we bought it in 2008. It immediately went underwater, and rents were well below our mortgage. These were dark times indeed.
But, now we are on the other side of the Great Financial Crisis, and our home has a lot of equity and a low-interest rate. This home in Arizona also has three acres of land.
We have many options for this property that can lead to incredible wealth. We can subdivide the land or get it re-zoned for multiple residences.
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We can add some mobile homes to the property to collect that sweet rental income. Whatever we decide, we can move forward with our children in mind.
Conclusion. My sons can easily move into the home in Arizona with their families. They can add four to six mobile homes that may pay them $2,000/month each.
All this while paying $1,700/month for a large 2,300 square feet home with five bedrooms, three bathrooms, and three acres of land.
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By the way, you cannot even rent an apartment in this part of Arizona for $1,700/month. That is the true power of buying real estate for our children—protection from inflation.
Don’t forget; you don’t have to buy another home close to your current home. You may need to take out a home equity loan and buy a $100,000 property in Alabama or Mississippi.
Over the years, this property will grow like a tree, and you will gather its fruits (home equity and rent) for years to come. As parents, it’s our job to plan for our children’s future.
Real estate is the best gift a parent can give to their children. But are you willing to endure the pain of owning multiple properties? Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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