by Michael Ertem
Like everywhere else in San Francisco Bay Area, rents hit the roof in Berkeley. The rental housing is very expensive around UC Berkeley campus and keeps going up.
With average monthly rents getting close to or exceeding $3,000 in Berkeley, you may question why you are are padding the pockets of university housing department and town landlords. Why not purchase an off-campus home or condo for Junior during college and sell it after graduation for a small profit?
Buying a home or condo for your child has benefits;
First of all, you don't throw your money for rental expenses; Your child will get one or several roommates and become a landlord. It teaches your child some responsibility. You are not just betting that the real estate market will improve and bloom when you buy a home for your child. You're hoping that your kid will, too.
Your child is not going to be crammed in a dorm room or beer soaked apartment complexes, or worst roach infested fraternity houses.
You may break-even at the end of three or four years, or you may end up with small to decent profit depending on the market. In the process, your child will not be moving each year and had a stable, clean place to live.
On the other hand, I also would like to warn against buying your student a house or condo if you're unsure of how you'll even pay for tuition and fees. If you are struggling to fund college, this is not a way to save money you don't have. It is not for you.
It's all about location, location, location. Berkeley is one buyer-friendly location if your child is going to be attending University of California at Berkeley where monthly rents top $3,000. Berkeley and surrounding cities have seen rents rise 20 percent from last year. That's compared with 4% home value growth during the same period. It would take less than two years to break even on a home purchase.
Since the topic is saving money and making money, you also want to save when buying a home or condo. That's where we come in. We will rebate one percent of the purchase price back to you to cover some of the closing costs, and when you are ready to sell after your student graduates from UC Berkeley, we will sell it at 1% listing fee, and hopefully another parent like you end up buying it for his treasure.
If you are an international buyer from China, India, Middle East, Europe, Asia, Australia, or Americas and need financing, I can also help you connect with lenders that can help you get a mortgage loan.