Using Real Estate to Fund your Child's Education

There is a very cool way to fund your child's education while avoiding huge taxes and having full control over your child's education. This way is by investing into real estate. Here is how to go about it: 1. Buy a home as your primary residence. 2. Live in the house for two years. 3. Then buy another house to live in. 4. Rent the first home. 5. If the first home stays under your ownership for a minimum of 5 years, all the capital gains will be tax free. You will be only liable for any taxes on the rent profits i.e. Taxable Rent = Rent - Mortgage Interest - Property Related Expenses Now imagine if you bought a house today for 300,000 and it appreciates on the average at 10% for next 18 years, it will be worth really 1.7 million dollars, far more than what you need for your child's education. Not only that if you pay only 20% down today, including mortgage etc your total investment would be probably 80K and then your tenants are paying the mortgage for the remainder of 16 years. And the best part is that if you child doesn't go to college, there is no penalty and you are free to do whatever you like to do with the money.