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I am possibly going to purchase a small condo in another state soon. I already own my own home , the condo will be in my name but my son will be living there for a few years. We are doing this to get instate college residency. I will then sell after he finishes college. My son will be paying the condo fees and utilities . My question is am I looking at any problems legally with this situation ? When I sell will it be considered a rental property or just a second property? Should I have a written contract with my son just in case ? What if he tries renting out a room to someone without my knowledge ? I really want to help him but so many things can go wrong.
I like the idea of a 2nd property and it can work as an investment if enough research is done on the area and history of the building. But as just mentioned above, be careful if you have doubts with what could go wrong. College aged kids will do dumb and often unpredictable things. Your investment could lead to many issues with parties, noise and breaking condo rules. Seems like a bit more risk for my taste. Now if buying strictly for investment, I would likely go the house route vs. condo. Usually better return and no rules to worry about. Good luck.
I am possibly going to purchase a small condo in another state soon. I already own my own home , the condo will be in my name but my son will be living there for a few years. We are doing this to get instate college residency. I will then sell after he finishes college. My son will be paying the condo fees and utilities . My question is am I looking at any problems legally with this situation ? When I sell will it be considered a rental property or just a second property? Should I have a written contract with my son just in case ? What if he tries renting out a room to someone without my knowledge ? I really want to help him but so many things can go wrong.
Most colleges require proof of residency over a period of a year; simply buying a condo in the same state won't get him in-state residency status.
In order to prove Georgia residency, we look at three primary determinants:
1. Students must first prove that they have established a primary or permanent Georgia home at least 12 months immediately preceding the beginning of classes for the semester in which they were admitted.
Typically, the residency status of a dependent student is tied to the status of the parent(s), or in the case of divorce, the tax-dependent or majority support parent, so the parent(s) must show proof of domicile.
2. Invariably, students and/or parent(s) of dependent students should also provide documentation showing payment of Georgia state income tax, as this shows a tie to the state that proves financial support for the Georgia educational system.
Mere property ownership in Georgia, by itself, is usually insufficient.
3. The Office of Admissions also suggests that students include copies of any other documents showing their intent to be a Georgia resident.
Accepted documents include: a Georgia drivers license, car or voter registration, home ownership, full-time employment records, etc.
Attending college in Georgia is not proof of intention to be a Georgia resident.
My niece is trying to establish residency in Iowa. She needs to live there for 12 months to be able to. Has transferred title to car to Iowa, gotten her driver's license, has a job and is renting a room. She can take up to a certain amount of credits, which ends up to be one class per semester, she can not be a full time student during those 12 months. I can see this easily going sideways. She does like Iowa anyway. She did get a two year degree as a out of state and some classes in her home state so she is slowly working towards whatever degree she is striving for.
I doubt him living in a home owned by you alone will be enough, he won't own it. Are you willing to take a loss on home if when you are ready to sell? I would think the same rules apply for a out of state home as in state home. You would have to consult a tax accountant for that in your state.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Just the fact that he might get a roommate without your knowledge makes me suspect your relationship with him. Not the roommate addition, but the fact you think he would do it behind your back.
I like the idea of a 2nd property and it can work as an investment if enough research is done on the area and history of the building. But as just mentioned above, be careful if you have doubts with what could go wrong. College aged kids will do dumb and often unpredictable things. Your investment could lead to many issues with parties, noise and breaking condo rules. Seems like a bit more risk for my taste. Now if buying strictly for investment, I would likely go the house route vs. condo. Usually better return and no rules to worry about. Good luck.
There are certain college towns in my state where buying a property for your kids and then keeping it as rental property has been very successful but there are also problems
Some renters are just terrible and can damage a property so often that your insurance drops you
Some places see steep rise in property taxes
And yes--the house vs condo depends on the area but usually houses are better investments unless area has strong support for condos...
You see some towns where apartment complexes are sold when property values are pretty strong and lot of pent up desire and turn those apartments into condos
Most of the time the units I see where that happens don't really have enough money put into the rennovation to upgrade to the quality of new construction condos---
They are only viable choices while there is strong demand---when more units are built/available they often lose value quickly...
Other posters are right. You must be willing to sacrifice the IRS and State tax deductions for your son...that's thousands of dollars right there. And in addition to his filing his own taxes, unless he switches his car title, DL, car insurance, gets all utilities in his name, votes, and preferably gets a pt job, some colleges, especially state schools, will charge non-resident tuition for all 4 years regardless of how long he's living there, especially if he's not paying rent or the condo's not in his name.
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