All Forum Posts by: Leo R.

@Michael A. re: house vs. condo...I generally avoid condos because they have HOAs that control what you can and cannot do with the property. Many HOAs have banned renting, and it's reasonable to assume that even an HOA that currently allows renting may not allow renting in the future. ...if you do go with a condo, you'll want to read up on property ownership within an HOA, and you'll want to review that condo's HOA contracts very carefully.

Quote from @Drew Sygit:

@Michael A.

We think the Midwest is a GREAT place for OOS investors to consider!

YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods: https://www.biggerpockets.com/...

Your biggest question shouldn't be WHERE to invest, but HOW you will invest!

Many OOS investors set themselves up for failure because they don't truly take the time to understand:

1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

2) The Class of the PROPERTY they are buying - which is relative to the overall area.

3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

7) That OOS property Class rankings are often different than the Class ranking of the local market they live.

8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.

9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.

10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.

11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.

https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799

Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?

Good luck with whatever you decide😊

 @Michael A.  -- @Drew Sygit has provided you with some EXCELLENT info here--and his post really shows his experience.

Congrats on saving up some cash and being ready to buy property.

As @Sergey A. Petrov mentioned, you might be better off first buying a local house hack, and THEN transitioning to out of state properties.  A house hack will teach you invaluable lessons about property management that you can then apply to future OOS investments (even if you have a good PM for your OOS investments, the property management skills you get from doing a house hack will help you more effectively manage your PM at the OOS property).

Also, a house hack is usually a more straightforward, easier strategy than an OOS investment. If you're a newbie, you may want to start off with the easier strategy first before graduating to more advanced strategies like OOS investing. In other words, if you're a beginner skier, don't try to go down a double black diamond on your first run (instead, start off on the easier terrain so you actually have a chance of success).

Good luck out there!

@Alicia Marks just like most folks, I was pretty scared the first time I bought a property. I was just a kid with a net worth probably under $5k, I had no experience owning or managing a house, and no experience being a landlord...but, I wanted to buy a place and house hack...

Because I was afraid of such a major commitment, I figured that my agent and I would spend weeks or months looking at properties so we could find just The. Right. One. (again, I was just a naïve kid at the time)

On the first day of viewing properties, my agent informed me that the average time on market was less than 5 days, and most properties received multiple offers above list price. At each property we viewed, there were other buyers there when we arrived, and other buyers there when we left. Demand was high, supply was low. As the Beverly Hills Cop theme goes: "The. Heat. Is. ON!" 

(Side note: when it's under 7 average days on market, "The Heat Is On" is the ultimate song for agents to play as they drive their clients around looking at properties).

Soon, we came to a property that was love at first sight. A cute, freshly rehabbed 3/2 in a very desirable, charming neighborhood. It had a beautifully finished basement mother in law apartment (perfect for my house hack!). I told my agent "let's do it!", to which he replied "OK...but, while you were marveling at that fancy kitchen upstairs, I was in the basement crawlspace. The whole house is original galvanized steel plumbing--it probably has 1-5 years left, and when it kicks the bucket, you'll be ripping out all that fresh drywall and the finishings in the basement. Total cost to rip everything out, re-plumb, and then re-finish could be around $40k-50k--and that's if you don't run into asbestos (which you will), and if you don't run into knob & tube (which you will)...this house is a lipsticked pig. Unless you want those headaches, I advise we keep looking."

At that moment, I was truly disappointed...but, more importantly, I realized my agent (who I barely knew at the time) had my back and could be trusted. It would have been much easier for my agent to just say "OK, I'll write the offer" and get a quick commission (remember: I was just a kid with no history with him at the time. As an experienced agent, he knew it was fairly likely an inexperienced buyer like myself would get cold feet and flake out after a few viewings. For all he knew, walking away from that house could cost him a commission!). But instead of going for his commission, he did what an experienced, A+ agent does--he initiated the due diligence process the moment we walked in the door, and he helped me avoid a big mistake (and cost himself time and potentially a lot of money in the process).

Luckily, about 5 houses and a can of Red Bull later, we found another place...less shiny and new, but better bones, and better suited for my goal of house hacking. *Target acquired*

We knew there was strong demand, so we put in an offer above list, and......... BAM!--WE'RE UNDER CONTRACT! (even after many years and many other properties, that thrill never gets old!).

Long story short, we got the house, the house hack was successful (both financially speaking, and in terms of teaching me a lot about property management), and I still have the property to this day (it cashflows about $1k/month, and has more than doubled in value since I bought it!). ...and now my agent and I are tighter than ever. After many years and many properties, we've been through a series of adventures (and misadventures) worthy of a Hollywood script--including flooded rentals, earthquake-caused property condemnation, unexpectedly canceled contracts, and even having to navigate a felony-level crime committed at a property we had under contract...but those are stories for another day...

Now, to answer your question: I spent about 1 hour with my agent on a Monday going over my goals and learning about his process...that Thursday, we spent about 8 hours looking at properties and making our offer, and we were under contract that night...so, it was a fast-paced process, and much quicker than I had expected (but that had more to do with the breakneck pace of my local market than anything). 

My story shows how essential it is for a newbie to have an experienced and trustworthy agent who knows when to walk away from a problematic property, and when (and how) to pull the trigger on a good investment.

As Kenny Rogers sang: "Ya gotta know when to hold 'em, and ya gotta know when to fold 'em"

Good luck out there!

@Jason Hu personally, I would never buy a property without seeing it in-person. To answer your question: yes, there can be major risks of not viewing the property yourself (particularly since you are a newbie). There are a million potential problems that could exist that cameras and photos don't pick up, and that your agent and inspector may or may not convey to you (e.g.; old galvanized steel plumbing, asbestos, foundation settling, proximity to busy and loud highways, deadbeat neighbors who don't maintain their property, proximity to bad neighborhoods, signs that the HOA isn't maintaining the area and other signs that the HOA is incompetent or not functioning properly, etc., etc., etc.). It surprises me that people are willing to put hundreds of thousands of dollars on the line for a property, but aren't willing to spend a few hundred bucks for a plane ticket and a couple days to verify the property themselves... The only time I would ever consider buying a property without seeing it in person is if I had Warren Buffet-type money, and the property was a tiny fraction of my net worth--and even then, I'd only do it if I had a highly, highly skilled realtor and inspector on the ground who I had a long history with, and who had repeatedly proven to me that they understood how to inspect and evaluate properties, HOAs and neighborhoods.

As for the HOA: My impression is that most HOAs around SLC do not allow owners to rent their units...if this HOA does allow you to rent, you'll want to do serious due diligence looking at the HOA's contracts, asking about the structure and governance of the HOA, investigating how easily the HOA can change their contracts and how often they've changed those contracts in the past, polling the HOA members and the owners in the HOA on their opinions about owner's rights to rent their units, learning about how easy it would be, and how likely it would be for the HOA to ban renting or do anything else that could up-end your business model, etc., etc., etc. As others have mentioned, an HOA really can control the fate of your business model--therefore, in order to buy an HOA rental property, you should have an emergency plan of what you will do if that HOA ever bans renting or does anything else that would adversely impact your business.

...and that doesn't even touch on the many other ways in which an HOA could potentially complicate or even up-end your business plan of renting (e.g.; increases in HOA fees, changes in HOA policy that effect how you manage your unit, HOA decisions to change or eliminate amenities that make your unit less attractive to renters, etc., etc.)...

On the flip side, I suppose it's conceivable that there's an HOA out there that is completely pro-renting, that has locked-in and reasonable fees, that could never change its rent policy, that is competent, and that would make your business run more smoothly (if you find an HOA like that, I'm sure we'd all be interested to learn about it!) ...and indeed, there are folks out there who successfully invest in HOA rentals...it would be advisable to find those people on the BP forums and get their input on your situation...

At the end of the day, YOU are responsible for doing your due diligence. Leaving your due diligence completely in the hands of other people (even experienced people), and just trusting that they will handle everything for you is often a recipe for disaster. Realtors often don't know how to evaluate the condition and rentability of a property, and may not convey information to you accurately over the phone. Inspectors can and do miss important items. Your agent probably doesn't have the experience (or time) to do all the needed due diligence on the HOA. Because of these (and many other) reasons, you want as many eyes as possible (including your own) on the property before you pull the trigger. Additionally, if you want to be a successful RE investor, it is your responsibility to learn how to assess properties--and that usually means viewing many properties with your own eyes (and, if you're inexperienced, paying a professional to view the properties with you to teach you how to spot potential problems).

Good luck out there!

@Angela Persico based on what you've told us, I think that your top priority should be to have this tenant leave ASAP and find a new, better tenant. The longer you allow this tenant to stay and keep missing payments, the worse the situation will become (and the more money you will lose).

There are a  variety of ways to get rid of a tenant (eviction is one, but it's time consuming and can cost a lot, and you need to follow the law and local regulations).  Cash for keys may be a better option (pay the tenant to leave).

I'm not sure hiring a property manager will solve your issues...Good PMs are very, very rare (and often, good PMs have no interest in taking on a single house with a deadbeat tenant and a distressed owner--they have bigger, better fish to fry). Moreover, finding, screening, and managing a PM (yes, you need to manage your manager) is challenging, and it often requires experience as a landlord/PM (an experienced landlord/PM is better able to screen PMs, find a competent PM, and manage that PM)...but, you are not an experienced landlord/PM, and it by your own admission, you're pretty bad at it...so, you're ill-equipped to find a good PM and manage them through a solution to your challenging problem....  We all hear horror stories of inexperienced landlords hiring inexperienced and incompetent PMs, and it costing the LL a ton of time, money and frustration--in your situation, a PM is almost as likely to ADD to your problems as they are to solve your problems. ...not to mention the fact that if you did get a PM, you'd be immediately handing a them a big problem to solve (a problem you created), and most PMs do not have the experience, or the incentive to solve such a big problem for a brand new client that they have no history with, who only owns one property.  If I were a PM, why would I want to put in the serious effort, and expose myself to potentially serious liability, to solve this giant problem you created, when I'm barely making any money in the process and it's clear that you would be a small time, high-maintenance client? PMs want big time clients with large portfolios, and they want those portfolios and the tenants to be as low-maintenance  as possible, and they want the LL to be as low-maintenance as possible (you're literally the polar opposite of all that, based on your story). To a PM, you will be viewed as low profit, high maintenance, and high liability, and it's very unlikely they will have sufficient incentive to solve this problem for you (even if they have the experience to solve it--which they may not).

Even if you could magically find a PM who is experienced enough, and motivated enough to solve your problem for you, you need to take responsibility for this situation, take a role in solving this problem, and learn from it so that it never happens again. If you plan to keep investing in real estate and continue being a landlord, then you need to quickly improve your approach to avoid these types of problems, and having someone else (like a PM) solve your problems for you doesn't make you a better landlord...if you don't take responsibility for this situation and learn how to solve it, and learn how to avoid it in the future, then this type of problem will re-occur (even if you do have a great PM--because again, you need to manage the PM, and if you're not a competent LL, then your management of the PM will also be incompetent). The PM is NOT a magic-bullet solution, because if the owner is an incompetent landlord, then they will be incompetent at managing their PM, and as a result, the PM will be ineffective at solving tough problems.

How do you become a competent LL? There are countless books, podcasts, forum posts, youtube vids, articles, etc. to learn from--obviously, BP is an excellent source for much of this info. Read up, and try to learn from other people's mistakes as much as possible.

How do you fix this problem with your tenant? I think the first step is to approach the tenant and say "Look; this clearly isn't working out. You need to move to a place that better fits your needs. How soon can you move out, and what do you need in order to move out?" and see what they say, and then work toward some agreement for them to leave that works for you....If they DON'T agree to leave, it's probably time to begin the eviction process. If they DO agree to leave, write up a new contract that cancels the existing lease, and stipulates the exact terms of when and how they will leave, and what financial transactions will occur. This new contract also needs to explicitly describe what will happen if they don't abide by the contract's terms--for instance, what will happen if they don't leave the property in good condition by the agreed upon date, or don't pay you the agreed upon fees by the agreed upon dates? ...this contract also needs to include agreed upon terms for payment (will they pay you their outstanding debts, and if so, when and how will they pay? will they be liable for late fees? are you waiving some or all of their outstanding debts to incentivize them to leave? what is the status of their deposit?, etc.)  

To quote one of the greatest movies ever, you need to "make 'em an offer they can't refuse" and incentivize them to vacate and abide by the new terms you put in your new contract.  You could incentivize them to leave and abide by the new contract in many ways. For instance, you could agree to cancel some of their outstanding debts, and/or you could make it clear that their security deposit will be withheld if they don't leave under your terms, and/or make it clear you will file a lawsuit to recover the money they owe you if they don't meet your conditions, and/or get a collection agency involved, and/or you can make it clear there will be an eviction for non-compliance with the contract (among many other methods)...I would also suggest reading up on cash for keys, and seeing whether that strategy could work...talk to the tenant to get an understanding of why they are staying, what things would prevent them from leaving, what things would incentivize them to leave, etc.  ...ultimately, you need to create a new agreement (in a new contract), where the option of leaving and abiding by the terms of your new contract is MUCH more appealing to the tenant than the option of staying and/or violating the terms of your new contract.  However, before you pursue ANY of these options, you need to educate yourself on the relevant laws/regulations to make sure you're not doing anything illegal--a decent lawyer can help you understand which of the various options is feasible and lawful, and can help you create a new contract for the tenant to sign that stipulates the terms and conditions for them to vacate and (if relevant) re-pay their debts.

At the end of the day, you need to assess what types of lawful incentives you're willing to create to get this tenant out ASAP, while also doing a cost/benefit analysis of how much money and time you're losing in the deal, and how much money/time you can save by getting a better tenant...  and no more payments via checks! (we have much more effective payment methods these days).

Good luck out there!

@Chris G. it's very common for deadbeat tenants to threaten lawsuits against landlords. It's also very UN-common for them to actually file those lawsuits--primarily because it's difficult and expensive to do this, and most of the time, the money and time they'd spend filing a lawsuit is more than the lawsuit would be worth if they won (and they often have no chance of winning).

Having said that, its also common for NON-deadbeat tenants to threaten lawsuits against deadbeat landlords--in which case, the tenant may actually follow through and file and win a lawsuit (depending on how bad the landlord was about violating relevant laws/regulations).

Assuming that your communications with the tenant about late rent have always been professional, and follow any relevant local/state laws and regulations about landlord behavior, then it's very doubtful that repeatedly asking a tenant to pay their late rent could be considered "harassment" (I'm not a lawyer, though--so you'll want to do your own research and not take my word as the absolute truth). Assuming you're running a professional operation within the bounds of the law, then asking tenants to pay their rent is completely legitimate.

The first time a tenant threatens to sue, it can be alarming...but believe me--at a certain point, you've heard these baseless threats so many times, and you're so knowledgeable about the relevant laws and your own rights as a landlord, that you become emotionally numb to most lawsuit threats (again, assuming that you're operating a professional business that's within the bounds of the law).

I don't know about the energy audit, but it sounds like just some more blustering the tenant is doing to try to intimidate  you....if the tenant is responsible for the utilities, and they think their utility bill is too "high", the obvious response is: "you have total control over the amount of utilities you consume. If you think your bill is too high, then turn down your AC, stop consuming so much, etc."

Assuming that you're running a professional operation within the bounds of the law, this tenant sounds like more headache than they're worth, and I'd suggest looking into the legal ways of having them leave ASAP so that you can get a better tenant.  ...it may be worthwhile to just text the tenant and say  "Look, you're clearly unhappy with the property. Let's settle the out-standing debts, and then I will cancel your lease with no penalty, and you can leave and find another place that better suits your needs"  ...obviously, keep the deposit until they have vacated on the agreed-upon date, and you've verified that they didn't damage the property...

Good luck out there!

@Tyler Mehigan things to consider:

What type of pet?  A highly active 90 lb dog that runs around indoors all day long could cause some damage, but an 8 lb lap dog that sleeps all day might not cause any damage. ...this is why it's important to meet the pet in-person before making a decision...

What type of property, and what things in the property could be damaged? I have a unit where all the floors are tile, and the subfloor is concrete slab--even if a pet had an accident, it would be easy to clean up, and it's virtually impossible to damage the tile floors. Carpet over plywood subfloor, on the other hand, could have some real damage if a pet repeatedly urinates on the floor...antique hardwood floors can get really scratched by a large, active dog....antique single pane glass windows could easily be broken by a large dog...  so, you need to consider how durable (or how fragile) the property is...

How responsible is the tenant? There are plenty of highly responsible pet owners who take care of their pets, and make sure that their pets are well-trained and well-behaved...and then, there are also deadbeats who simply have no business owning a pet at all, and their pets are disasters waiting to happen...

How much liability comes with the pet?  If your tenant wants to have a 100 lb highly aggressive, non-trained dog, and your property is right next to a playground, that's a huge liability...if your tenant simply wants a goldfish in a small fishbowl, that's probably minimal liability...

I've had plenty of tenants with pets, but I screened those tenants and the pets thoroughly, and so far, I haven't had any major pet-related disasters (knock on wood).

If you do allow pets, your lease needs to have a clear pet policy that states that you are not responsible for the pet, that you're not liable for anything that the pet does, and that the tenant takes full responsibility for the pet and will pay for any and all damages caused by the pet.

Good luck ou there!

@Doug Norton other critical issues include: decreasing availability of water and increasingly poor air quality, and an impending earthquake that is anticipated to cause significant total loss rates for the un-reinforced masonry buildings that make up much of the housing stock in the city...obviously, nobody knows when that will occur, but geologists generally agree that the earthquake is a matter of "when", not "if" (yet, my impression is that very few property owners have earthquake insurance)...it's hard to know how these issues will play out, but there is evidence that one or more of these issues will become un-ignorable on a 10-30+ year timeline.

ADUs are an interesting prospect, but the last time I got quotes for building an ADU in SLC, the numbers really didn't make much sense in terms of ROI as a long term rental...of course, people build ADUs for reasons other than ROI, so it will be interesting to see what happens...

Between the world-class outdoor attractions, events like Sundance Film Fest, and all the other attractions of the city and surrounding area, I would think that demand for STRs could be pretty huge...the city doesn't allow STRs, but as you mentioned, that doesn't stop people from doing them, and my impression is that some folks have cleaned up using ADUs as STRs...

As with any place, the SLC RE market is highly localized, and there's a solid argument that the desirable neighborhoods (the Aves, the U, Sugarhouse, E Millcreek, and most stuff on the E side) will always be in high demand--everyone wants to live in these areas, and there's limited supply.  On the flip side, less desirable neighborhoods could get hit pretty hard in a market downturn (and there's evidence we may be in the midst of a downturn right now).

For instance, this report showed that in January, inventory was about 200 houses under 700k, and now we're at around 1100 houses under 700k. Avg days on market had been less than 7 days for most categories a few months ago, and now it's around 20-30 days for some price categories.   https://www.biggerpockets.com/...

Having said that, the "less desirable" neighborhoods went on a huge bull run over the last couple years--I saw data a while ago that "less desirable" areas like West Valley City and Rose Park had more appreciation last year than highly coveted areas like Sugarhouse...My subjective impression is that the highly desirable areas like Sugarhouse, E. Millcreek, the Aves etc. have become so expensive that most "normal" buyers have been priced out of those neighborhoods, and have switched their focus to areas like W. Valley and Rose Park--driving up demand and prices in those areas.

To that point: I just did a zillow search for single fam houses under $500k inside the interstate "beltway" (N of I80, E of I15), and there were a grand total of....get ready for it.....THREE houses! (All were only 2 br / 1 ba, and all were either on, or right next to four-lane highway or interstate...none were in particularly desirable neighborhoods).

Nationally, the tech sector has been hit pretty hard over the last 12 months, and could continue to struggle as long as interest rates keep climbing (which they probably will for the foreseeable future).  ...I don't know how much this will impact tech sector employment and housing demand in SLC specifically, but you'd think it would have some effect (SLC has a pretty multi-faceted economy, but tech has become a pretty decent piece of that pie in recent years)...

Since I came to SLC, I've seen the city change pretty rapidly in a relatively short period of time. The first time I ever rented a property to tenants in SLC, about 50% of the applicants were native-born Utah people...today, I'd say that only about 5% are native Utahns, and the other 95% are people moving here from all over the country...so, anecdotally, it does seem like we've been experiencing a significant influx of people moving here (and the population growth has been well-documented). 

SLC GDP has increased quite a bit over the last 20 years--as you can see here: https://fred.stlouisfed.org/se...

SLC real estate also did well over the last 20 years--going on a serious bull run from about 2015-2022:  https://fred.stlouisfed.org/se...

Over the last 12 months, I've heard credible arguments that SLC is a bubble about to burst, that it will simply plateau for a couple years, or that it will continue on a bull run for the foreseeable future...so, who knows?

Good luck out there!

@Alex Shapiro it's entirely property specific.  I have 120+ year old properties that are rock solid and rarely give me issues (they've been well-maintained, and the electrical, plumbing HVAC has been updated), and I have 10-year-old properties that are nothing but headaches (e.g.; settling and cracking foundations, poor materials and design, etc.)....of course, there are also plenty of old properties that are dumpster fires, and plenty of new properties that are excellent...it varies from property to property.

Personally, I like well-maintained old houses because most significant issues (like foundation settling) either have occurred and are clearly visible, or they've been addressed...whereas a brand new house can be a dice roll (you're basically the guinea pig who gets to be responsible for any teething problems the house might experience in the first 10-20 years of existence).

People who say "new properties are less work" are demonstrating their lack of experience--a new property is not always a guarantee of less work, and new properties sometimes have problems that old properties don't.  I once had a new, beautifully finished property that looked incredible...3 months into ownership, the finished basement flooded (the slab had been poured too close to the water table, so when ground water rose, it flooded). Trust me, that's NOT a problem you want to deal with (but I dealt with it on a new property!).

  Point being: assess each property individually on its own advantages and disadvantages, and don't blindly follow overly-simplistic mantras like "new houses are better".

Good luck out there!

Quote from @Bruce Woodruff:

@Leo R. I'm not just talking about the cost of tuition. I'm also including the cost of living (housing/food/etc) that comes with a full-time college path. Let's say $3k per month or thereabouts? Add that to even a minimal tuition ($10k yr) and it adds up to money spent and time wasted.

Again, for some people....YMMV.

The costs I mentioned for myself included debt for costs of living (in fact, most of my debt was for cost of living, since most of my tuition was covered via scholarships/grants...if I had been willing to live in a cheaper rental in grad school, my debt would have been less). During college, I lived in student housing that was covered via grants/scholarships, but in grad school I rented a privately-owned property that I had to pay for via a combination of my own money and student loan debt.

I'd say that in most circumstances, if a college kid is blowing through 3k/month, they're living a much too lavish lifestyle (and probably don't have sufficient scholarships/grants). As an undergrad, it's advisable to live in student housing and eat on a meal plan that is either fully or mostly paid for via grants/scholarships, and most or all of the tuition should also be covered with grants/scholarships....even if they don't have grants/scholarships to cover housing, cheap student housing should run 700-1000/mo in most college towns.  ...when I was an undergrad, my monthly out of pocket expenses were probably around 500 (approx 800-1000/mo adjusted for inflation).

Of course, some kids can't get scholarships/grants, in which case they may want to do something that puts them in a position where they COULD get scholarships/grants (for instance, gain field experience that makes them more attractive to scholarships, or find an employer that offers scholarships/grants), and/or they should look for cheaper colleges...or just not go to college at all--it's not for everyone, and plenty of people do better without college.

But yeah--if being in college IS costing you $3k/month, you'd want to really closely evaluate that ROI...at the end of the day, it's like anything else: a cost / benefit ratio--if the costs are too high, and the benefit is too low, do something to change the ratio, or find a different plan...but definitely don't buy a Mercedes until you have Mercedes money.