<p>Now is NOT the time to buy and flip. Now is the time to buy and hold. If you don’t have the spare cash - that is, cash you can live without for a few years, then DO NOT BUY. If you have some spare cash, now is a great time to buy real estate. Some markets are better than others. Some markets (like where I live) have been somewhat insulated from the real estate crash. Yes, prices have dropped, but that is a good thing to someone interested in investing in real estate. I don’t have a crystal ball, but I think around here (a college town) we are bouncing along the bottom. We have a glut of condos, so they are going cheap. Some even have tenants already in place. Yep, it’s a good time to buy.</p>
<p>I have a different concern … this forces your child’s housing decision into the condo … while the expected numbers <em>may</em> show a profit after 3 years … what if your child … wants to live in a dorm?, join a frat?, or transfer? Now you’re a long distance landlord without someone on-site.</p>
<p>3togo - you have to do what makes sense for you and your family. I get calls from investors from all over the state who are interested in buying condos here because they are such a good buy right now. With interest rates creeping up, that may not be true a year from now. </p>
<p>The short sales have been around long enough that most have been appraised by the seller’s lenders, so a buyer can make an offer based on the price approved by the lender. </p>
<p>I guess I am optimistic about the future. True, it is going to take a long time to reach the housing prices we saw just a few years ago. Still, the market will rise over the next 3-5 years - taking today’s well-priced condos with it.</p>
<p>"Now you’re a long distance landlord without someone on-site. "</p>
<p>actually you do have someone on site, if they can spare the time from their studies and their frat parties to manage the property for you :)</p>
<p>Probably wouldn’t make sense for most kids. But my DD is an Arch major. If I was in a position to invest like that, and give her that experience in property management (perhaps in lieu of some work study job) I would be tempted.</p>
<p>“65k-85k for a condo??? wow, that doesn’t get you a nice inground pool in the NE”</p>
<p>-No NE. D. is staying in Midwest. No inground pool needed. All schools have pools and she is a big time swimmer who is using them for work outs. Inground pool is nothing really, and more so in Midwest. The price is very reasonable for Midwest, but it depends on the city. We do not know yet, D. has not decided on school.</p>
<p>Before I undertook any such investment, I’d run the numbers assuming a 10% price decline over my holding period. That’s before any of the obvious costs such as commissions, taxes, insurance, depreciated improvements, utilities, etc. At the very least, I would assume 0 appreciation.</p>
<p>I do not look at it as investment, we will be paying rent anyway. If it is cheaper than paying rent then we will consider it, if not, then forget it.</p>
<p>I intended my post generically, and not addressed toward yours.</p>
<p>It’s still an investment, however, even though its significance varies depending on your net worth.</p>
<p>BTW, does anyone think this article is anything other than the real estate industry attempting to breathe some life in the market? CB is reporting that 65% of its agents see significant numbers of parents interested in buying real estate in college towns? Complete balderdash. On cc here, my guess is that 90% of parents are trying to figure out ways to minimize their kid’s tuition bill. It hardly fits with this story.</p>
<p>And the article is hardly compelling. The family can’t sell the place they bought. My guess would be that they’ve lost $100K before calculating in any carrying costs. Now, peace of mind may be worth that much, but that’s a calculus that doesn’t apply to very many people</p>
<p>Old news. In the 80’s, i recall that half of Chicago’s North Shore bought condos in Tempe AZ for their little darlings going to Arizona State.</p>
<p>^This is ancient times, completely different economic and real estate situation.</p>