I have written about “kids at school” in prior posts. With more kids at college and grad school (grad school, especially grad school, because jobs our of college are becoming so scarce), there are some strategies we can suggest for “kiddie” condos which may produce some sales for realtors, mortgage originators and real estate attorneys (my defined group “The Resource Triangle”.

These are my thoughts:

      1. Price of Condominiums are lower than they have been. Certain areas of Boston have held up better than others; in general the market is soft, especially in the $200,000 to $400,000 range.

      2. Rental prices are increasing because people have to live somewhere, and they are not buying as rapidly as they did. The rental population is on the increase, as well.

      3. There are some distinct tax strategies which make a parent’s purchasing a condominium for his or her child during the time that the child is a student:

          a. After tax benefits, the actual cost may be lower than rental.

          b. At some point in time, the parent can make the child the owner of the Unit, thus entitling the child to take advantage of the $250,000 exclusion when the Unit is sold. In Boston (and other cities, I am assuming), owners who live at the premises are also entitled to favorable real estate tax treatment.

          c. If we are at the bottomo of the real estate cycle, or close to the bottom, the appreciation in the Unit can be passed on to the child, rather than the parent. That becomes a handy way to handle estate planning transfer for the parent.

          d. In Boston, I am aware of several Lenders who have developed “Kiddie” Condo programs. Wainwright Bank, a Lender for whom I do a lot of work and an ActiveRain member, has such a program.

If your customers need any further advice about Kiddie condos, have them contact me directly. I have completed at least fifty (50) of thes e deals in the past three years, all of which have worked to the Parent’s advantage.