Just as with the first property, their son is now living rent-free, and the property has positive cash flow.  To pay for the property, they once again used their home equity line and also a 10-year home equity loan against the first rental property.  They have since refinanced the property with a 30-year mortgage.

Added Benefits

Having a son living in each rental property has saved Greg and his wife from countless headaches.  Plus, their sons have learned how to keep up with home maintenance and take responsibility for resolving roommate disputes

It has also given Greg additional time with his sons as they’ve done repair work together and talked through the various issues that come with owning rental property.

Lessons Learned

Both of the rental properties are close to campus – half a mile away in the first case, nine-tenths of a mile in the other – which Greg points out is essential in order to rent to college students.

Since he is the primary handyman, he also needs to be within driving distance of the properties.  In retrospect, Greg says the first rental is too far away. “Whenever something breaks, because I’m cheap and don’t want to pay someone to fix it, it makes repairs more of a hassle.”

Still, after their sons finish school, Greg and his wife plan to keep both properties, figuring they will provide a nice flow of added retirement income.  As their third son nears college age, Greg says they’d consider doing the same thing with him, as long as he chooses a school that’s within an hour’s drive.

What other creative college funding ideas do you have?

Matt Bell is the author of three personal finance books published by NavPress, including the brand new "Money & Marriage: A Complete Guide for Engaged and Newly Married Couples."  He teaches a wide variety of workshops at churches, conferences, universities, and other venues throughout the country.  To learn more about his work and subscribe to his blog, go to: www.mattaboutmoney.com.