ASU Housing launched by management team at Merchants Realty & Loan Corp

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) January 9, 2011 -- ASU Housing launched by Merchants Realty & Loan Corp to assist parents of Arizona State University students in finding a more financially rewarding solution to student housing. With today's low mortgage interest rates and housing in the Tempe, AZ area at an all time low, there will never be a better opportunity for parents to take advantage of this investment for their children/students at ASU.

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ASU Housing launched by management team at Merchants Realty & Loan Corp

Welcome visit Our WebSite:

http://www.asuhousing.net

The following article was released today by Tina Gibson at Merchants Realty & Loan Corp to break down the benefits of kiddie condos versus traditional student housing.
http://merchantsrealtyandloan.blogspot.com/2011/01/asu-housing-opportunities.html
Do you have an ASU student? Instead of renting a house or living on campus, how about buying? Here are some advantages of purchasing a kiddie condo in Tempe, AZ:

Do you have a student attending ASU in the fall of 2011? We all know that it is always a good idea to have them live on campus the first year so that our child can get acclimated to the campus as well as the area, but what do you do after year one? The cost of student housing is very expensive and continuing to rise. Rent is a losing situation because you can’t write it off nor can you ever recoup the amount spent. However, there are alternatives to student housing if your student is responsible; is willing to ride a bike, take a bus, or drive a car instead of walk; has good credit and may stay in the area after she or he is done with school. The obvious alternative is purchasing a condo or a single family home. More than you’d like to spend you say; you’d be surprised. Many real estate investors have known for a long time that buying units near a college tends to be a safe and equitable investment. The demand for housing near a campus is always great.

On average at ASU you will spend $6500 a year to live on campus; which is a little over $800 for 8 months of housing. In todays market, condos can be purchased in Tempe for as little as $45K. That would give you a 2 bedroom condo with association dues of about $150 a month that includes your water, trash and use of common area amenities such as pool and gym. Alternatively, one can buy a 3 bedroom single family detached home for around $150K. There are many advantages to owning versus renting, as we all know: for one, the student can use this as an opportunity to build his or her credit history. Tax benefits of owning far outweigh renting, and the equity being built is a bonus as the same output of monthly expense is being made, but most college dorms have room for roommates, which is the same principle here; he or she can charge roommates rent (which the $300-$400 expense is significantly cheaper than dorm life) cutting down on YOUR individual monthly costs, thus you gain equity for others making the payment.

How would this work you may ask? Well it depends on the type of property you purchase. Below I will give you 2 examples of the different types of property you may purchase.

Example one is a 2-bedroom condo purchase:
▪ $65,000 purchase price
▪ -$13,000 down payment at 20%
▪ $52,000 loan amount
• Loan program fixed rate example of 5% on a 30 year loan
• $271.00 principal and interest payment
• $66.00 Real Estate Taxes monthly

• $150 condo fee (condo fees in the area most likely includes water, trash and common area amenities)
• $487.00 total payment
That is almost half of what you would pay in student housing! You may say, ‘well I still had to come up with $13,000 to put down on the condo?’ Let us do the math; If your child rented out the second bedroom for $300 over the course of 3 years that room would gain you an additional $10,800. After which point your student can continue living in the condo after graduation and/or rent the condo out to students at a rate of $650 a month for the next four years and that would be a positive cash flow of close to $9000.

Example two a 4 bedroom single family detached home
▪ $170,000 purchase price
▪ -$34,000 down payment at 20%
▪ $136,000 loan amount
• Loan program fixed rate example of 5% on a 30 year loan
• $730.00 principal and interest payment
• $142.00 Real Estate Taxes monthly
• $872.00 total payment

In this scenario your payment is very close to what you would spend on housing expense in the dorm, but now you an additional 3-bedrooms to rent without the added HOA expense. Three bedrooms at $300 would be $900, which would then pay your mortgage and it would be like your child was living rent free for the 3 years left of college. Of course you still have the down payment amount, but to think that you would have paid a minimal amount of $6500 per year towards dorm fess, which is about $20K without tax benefits, equity gain, and potential future profits.
Exit Strategy:
▪ Investment, when your student matriculates from school, both you and your child are partners in owning a rental property. Provided both you and your child wanted to continue with the investment, your child will have the upper hand in the rental market as he/she will have a firm understanding of the marketplace and will be able to keep renting the unit to new students coming to the area.
▪ Your child has a property she can live in while attending graduate school or the beginning their career.

▪ Sell the property. The savings in annual expenses you have already experienced far outweighs any perceived loss.

At Merchants Realty & Loan Corp we look for ways to assist our clients in making sound investment choices. We have a team of real estate professionals as well as numerous mortgage loan options. Contact us with any real estate need or question you may have.

Merchants Realty & Loan Corp is a boutique real estate and mortgage brokerage firm specializing in first time home buyer transactions. Our BuyReady™ Program is the leading first time home buyer program on the West Coast with 100% of all applications processed approved through Jan 1, 2011.

More information can be found online at http://www.asuhousing.net

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