College student housing - my name or hers?

6 Replies

I’m looking at properties near my daughters school, (iowa state university in Ames, iowa) to alleviate the wasted cost of student housing.

Planning a three bedroom, so two roommates.

My question is how to structure. I want to own the property, at least partially but am thinking maybe we should shoot for a lower interest rate as a primary residence and put her name on it. Thoughts?

Very very smart idea to buy the house instead of rent for 4+ yrs!

I have two questions here.1. control, obviously if you dont have it in your name she can sell it or do whatever she wants with it post college or even during if something extreme happened. Maybe i’ve watched too many movies but the college person who is romanced/brainwashed by someone and goes down a different path that what mom and dad have hoped for.

On that same note an your daughter qualify for the low int rate mortgage? And remember if you are providing her with a downpayment, a bank will see that money transfer and might have concerns with the loan. You will want to be very clear with your bank.

And finally interest rate, from what i’ve seen investor rate va primary rate is about 1-2 % different.  Yes, a 3% int rate loan is crazy good but big picture so is 5%.

As to what would I do? I'd by the property in my LLC then write up a contract to have her be the property manager and pay her 10% for managing in and the "requiring" her to put that into a ROTH IRA. And this would come with the investor inst rate loan.

All in all good luck!

@Tracy E. get ready to have your mind blown...

You can actually buy a property for a child in college as a PRIMARY RESIDENCE using Conventional financing!  5% down, and primary rates.  Same guideline applies for an elderly parent that doesn't have income to qualify.  Not many people know this, and even worse, many LO's don't know about this either.

Unfortunately I'm not licensed in IA, but if you need someone there, shoot me a DM.

Best of luck!

@Zack Karp I had NO idea you could buy a primary for a child! I have contemplated the control issue too which is why I would like to have my name on it rather than hers.

THANK YOU for the great advice!

@Darson Grantham true on the interest rate. Might be worth the difference to maintain full control. I was hoping for a way to do both - have it in her name, keep mortgage rate lowest possible, help build her credit as a bonus but retain partial ownership

I will be paying her portion of the ‘rent’ so I don’t want a contract to pay her any additional. Thank you for the great advice!