If you are the parent of a college kid,  you might want to take a minute to think about real estate investing.  You’re already spending a ton of money sending the kid to school, “investing” in his or her future, so why not hedge your bets on an investment that might actually pay you back someday?  Think about it- you’ve got at least four years of living expenses to pay for on top of the tuition. You can either throw it away paying for a tiny, overpriced dorm or some dumpy, overpriced rental, OR you can take that money and put it toward something that has a future. Like real estate.  Let me explain…

I went to Western Washington University, here in Bellingham, so I will use it as an example, though the numbers would likely look quite similar in just about any college town. Rates per person at Western’s dorms run roughly $500 (3 kids in a room) to $800+ (single occupancy) per month, NOT including food expenses.  Rental rates anywhere near campus run about $400-600 a month per room, depending on the number of rooms.  Studios and 1-bedrooms are commonly $700-900/month, whereas you might find a decent  3-bedroom for $1400.   Let’s be conservative and say it’s about $600/month on average, per room. Over 4 years (48 months) that’s almost $30,000(!) that you will NEVER get back.  As Everett Dirksen famously said,“ A billion here, a billion there…pretty soon you’re talking about real money!”

Consider this:  Right now, you can buy a 1-bedroom, 600 square foot condo, built in 2006, less than a half-mile from Western Washington University, for $140k.  With 20% down at 6% interest, the monthly payment, which includes taxes, insurance, and HOA dues (W/S/G) comes to about $925, leaving only electricity and cable for expenses.  Sounds like kind of a lot, doesn’t it? Let’s take a closer look.

• Similar units in this building are currently renting for between $725 and $800.

• You can write off some (maybe  all) of your interest payments , giving you roughly 25% back at tax time, depending on your bracket, making the effective monthly expense closer to $700. Make sure to talk to your accountant about this and other creative write-offs you might find…

• As an owner, your monthly expenses remain fixed over time.  According to Cory Walken, a colleague who studies rent growth in the area, rents near Western have increased at an average of about 6% per year, over the past 5 years.  Assuming that trend were to continue, the monthly rent on that same unit would go up  to almost $900-$1000 by the 4th year of your student’s education. Over 4 years, that would cost you between $38000-$42000 in rent! Gone, flushed….never to be seen again…

• Don’t forget about appreciation! Even in these tough times, most analysts are expecting the market to have corrected itself in the next couple of years, meaning there is a good chance the value of your investment will begin to increase during the 4-5 years that your student will live there.  That’s right, you might even MAKE money on this thing! Worst case, you can always hang onto it to make sure the kid doesn’t try to move back in with you after college…

This is just one example, of course.  There  are several other condo opportunities I can point you toward.  There are also houses and duplexes, etc… The numbers can look even better if you buy something with more rooms. Then, you can collect $500-$700/month of OTHER PEOPLE’S money! That ’s the best kind of money, after all…

If you’d like to look more seriously at this type of investment, keep in mind that there are all kinds of different programs available, requiring anywhere from 3.5% to 20% down.  You can buy as an investment property, as a second home for yourself, or possibly as a first-home for the kid, which means eligibility for the $8000 first-time buyer tax credit. Each of these options has it’s own credit and income requirements, as well as unique tax implications.  Again, I would suggest consulting your accountant, as well as a mortgage professional, to make sure you understand clearly these particular details. You can talk to me if you want to know where to find these properties.

I can be reached on my cell at 206.883.6668, or by email at rob.leroy@exprealty.com

For more information on loan programs, you can talk to Jack DeCook, Senior Mortgage Consultant at Wells Fargo in Bellingham, 360.319.7119 jack.decook@wellsfargo.com.

This post simultaneously published by Rob LeRoy at theRealEstateNovelist.com

Do you remember your high school days? Maybe you do, maybe you don’t. However, have you reflected on the teachers, the experiences, the traditions of your high school? 

Well, many of us here in Whatcom county find ourselves back here at some point in our lives. We move away, go to college or find our passion and then it happens.. We come back.

I have done this along with many people I know. With this process, the thought comes through your mind as to where your going to live in Bellingham. Do you choose the area where you went to high school? My answer…yes more often than not.

Living the dream myself where your children are gracing the hallways you once did. I have to say a miriad of emotions transpire. I will never forget the day I sat in the bleachers for my oldest daughters freshman orientation and everything hit me. The smell of the gym, the teachers who have remained(there are about 8 currently),the spirit fo the ASB president,and  the voice on the microphone, not Mr Goodman, but the message the same. Sehome tradition is alive.

Sitting there I started to recall the assemblies, the classes, teachers and little things like the Mariner Mile and Taylor Street stairs as part of your sports introduction. Turning to my freshman and thinking about all the things good and bad that she will experience was overwhelming and exciting.

It is now 4 years later and my freshman is now a senior ready to graduate. Senior culminating project completed, WASL passed and ready to move on the the next step. Looking back at her paticipation on the swim team, wearing the green and gold cheering for her final lap in the pool, her essays, artwork, drama practice,spanish classes and much more! Of course she choose her own way and with that, a cap and gown flowing and a final toss of the cap it’s over.

Some of her friends chose to paricipate in running start a program to recieve early college credits. There is a plus and minus for this I have observed. She wanted to experience high school, the good the bad and the challenging aspects. She said “you only get to experience high school once.” Many times she was sad that her friends missed out on little things and had a disconnect with activities. She was happy with the choice she made.

And so now the tradition continues with her little sister, Marching in the Ski 2 Sea Parade holding up the Sehome Banner as a newly chosen member of the Cheer Squad. With a smile from ear to ear and sporting the Green and Gold I want to say to both my girls I am so proud of all you have accomplished and all that you will be you are truly both amazing individuals.

                                                                             Ski to Sea Parade 2009

Go Sehome 110%

Katharine Carey

A sweet and simple approach to real estate

360-220-5915 or katharine@buyertours.com

The Sehome neighborhood is home to families and college students who attend WWU. Because of its proximity to the university there is a mix of single-family residences and multi-family residences. Down the hill from Bill Macdonald Parkway from WWU is Sehome High School, which has by far the highest WASL scores of all three public high schools in the district. There are bus lines virtually everywhere in this area for the students. Sehome was one of the towns consolidated to form Bellingham back in the early 1900’s, like Fairhaven and Whatcom, and has its own historic district, the Sehome Hill National Historic District. Most of the homes in the area are at least 50 years old, and the streets are much narrower compared to the rest.