What’s Safer  - Student Loans or Short Sales in Ann Arbor?

Every parent hopes and prays their young prodigy grows up healthy,  goes to University of Michigan and marries a nice partner. To help children achieve great things in life parents have been known to work endless hours, forego vacations and scrimp/save for decades. Later in life it’s not unusual to find parents co-signing for leases, student loans or setting aside retirement funds to help put kids through college. Of course, just one look at the price of tuition and it’s easy to understand why – tuition has continued to increase far in excess of the rate of inflation for years.

Very few people ever slow down enough to question common wisdom – what is wiser to invest your hard earned dollars…student loans or short sales? They both have the advantage of leverage, they are both considered “good debt” and both increase the long term earning potential of the borrower. Is this a question or semantics or is there any way to truly differentiate between the two? Let’s take a quick look to sort through the specifics of each.

Devil in the Details

Student loans have historically been considered “good” or “necessary” debt since they tend to increase the total annual earnings of the recipient but hidden in those details is a devil of a fact – when adjusting for delayed earnings and adding back the high debt burden, increased income tax and student loan repayments much (but of course not all) of the average annual income discrepancy is minimized.

On the other hand, short sales provide immediate profit potential, make use of tax incentives and are typically able to take advantage of favorable Capital Gains taxation rather than the higher income tax rates.

Low but Unlocked Interest Rates

 Although student loan interest rates typically are low due to government subsidies, the ugly truth behind many of these loans is less than generous. Thanks to stringent repayment requirements, defaults are rarely eligible for bankruptcy protection and may actually impede the ability of the recipient to obtain employment or continue their education. Even worse, student loan defaults have resulted in wage, Social Security and even disability garnishment.  Thanks to compounding interest and hefty capitalization, it’s not unusual for a small student loan to grow completely unmanageable while the student is in college. For example, by capitalizing payments and then calculating compound interest, an initial debt of $35,000 can nearly double to over $80,000 before a student finishes their degree program even with a “low” interest rate. On the other hand, short sales not only have the advantage of low interest rates but they can actually lock-in those rates over a 30 year duration if desired. No surprises.

Different Defaults

 We’ve already mentioned the very high price individuals are forced to deal with in the event of a student loan default but what about co-signors or others? Sadly, not every student will finish University of Michigan. Rather than having a brilliant career ahead, parents are just as likely to encounter a grown child saddled with greater debt than ever – and no way out. When students default on student loans there isn’t anything to take back – no hard asset to sell in order to recoup part of your investment – nothing.  Investing in short sales provide protection for all involved; not only can the property be sold to offset losses but it can also be kept in the event everything turns out well.

With the average cost of college tuition expected to hit six-figures within the relatively near future, savvy parents, grandparents and others would do well to consider purchasing a short sale property to protect their child’s future. Not only can the property pay for a college tuition but provides peace of mind for all involved well into the future.

We know your time is at a premium, and we’re very grateful to you for lending us your thoughtful attention. Even if you’re not planning to buy or sell right now, we hope you’ll keep us in mind. If you like, we’ll send you a refrigerator magnet and some other cool stuff, so you won’t forget us. And if you should happen to know someone, a relative, friend or neighbor who is contemplating a move, it could be you’ll be their hero and ours, too, when you bring us together.  Currently condos close to campus: CND – Now Available.  To search all condos, click Ann Arbor condos for sale. 

Thanks to broker Chris McLaughlin, from Florida for his insights.

2607 Patricia, Ann Arbor Real Estate Jewell 

MOVE RIGHT IN TO THIS LOVELY WEST SIDE ANN ARBOR REAL ESTATE HOME! ALL THE WORK HAS BEEN DONE. LIGHT FILLED, ON QUIET COURT. WELCOMING LIVING ROOM WITH GLEAMING HARDWOOD FLOORS, W/B FIRPLACE AND SEPERATE ENTRY. OPEN KITCHEN WITH LARGE EATING AREA. ENJOY THE THREE SEASON PORCH FOR ADDITIONAL FUNCTION AND SPACE. GREAT FENCED YARD WITH PATIO. FRESHLY PAINTED. MINUTES FROM DOWNTOWN ANN ARBOR, I94, M14 AND THE UNIVERSITY OF MICHIGAN, NOT A SHORT SALE IN ANN ARBOR REAL ESTATE.

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Yet more news from the fantastic University of Michigan, which is proud to represent our state and the city of Ann Arbor.

The University has introduced its new Survival Flight plane which it can use in the state’s Upper Peninsula. The fixed-wing Cessna Citation Encore CE-560 will be on display at the Houghton County Memorial Airport, about 420 miles northwest of Detroit.

The plane first was used on Oct. 25 to deliver a heart to a transplant patient. Medical School instructor Dr. Brad J. Uren says the Upper Peninsula will be one of the areas served by the plane. U-M Survival Flight transports critically ill or injured patients throughout the continental United States, Canada and Mexico.

The schools fleet also includes three helicopters! With the winter weather coming and roads occasionally impassible, the new plane will surely play a great and important part of operations.

 The University of Michigan really is an exciting place to be and when you look at all its facilities , it really makes it one of the best schools in the country.

NEED MORE INFORMATION ON OFF-CAMPUS HOUSING AT THE UNIVERSITY OF MICHIGAN IN ANN ARBOR? CONTACT US!

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The Thomas Cooley Law School in Lansing has announced exciting news for the Ann Arbor community!

The law school plans to open a campus in Ann Arbor in time for the fall semester, with classes scheduled to begin September 8th at an 84,500 square foot facility located at 3475 Plymouth Road, the current home of the Ave Maria School of Law, which is leaving Michigan to relocate to Naples, Fl.

Cooley Law School, founded in 1972, opened in Lansing a little more than 100 years after Thomas M. Cooley became dean of the University of Michigan Law School. The new campus will be a marked event in the schools history. It is the largest law school in the country, with more than 13,000 graduates across the nation and worldwide.

Interest is high with deposits from 84 students having already been received for the September class schedule, showing the demand for a law school in Ann Arbor.

This really is great news for the city who already benefits from having a well educated and skilled population. It will be another added attraction for those looking at relocating to the area.

Click here to search Ann Arbor Real Estate using our complimentary Ann Arbor Real Estate MLS Search service. Alternatively please contact Kathy Toth and the team if you need more specific assistance in your Ann Arbor Real Estate needs.

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The news is not all doom and gloom when it comes to Jobs here in Ann Arbor Michigan.

The Wall Street Journal online has published an article showing that College towns are looking inviting when it comes to jobs and job growth.

It appears that college towns such as Ann Arbor, MI, Gainesville, FL, Manhattan, Kansas., and Boulder, Colorado have all posted lower than average unemployment rates (The national average is currently at 8.9%).

While college towns have long been considered recession-resistant, their ability to avoid the depths of the financial crisis shaking the rest of the nation is noteworthy. In some towns they are even struggling to fill posts at the University and are crying out for applicants.

There has been a growing trend in the last few decades where localities are bringing down divisions between themselves and their universities and learning to work together and naturally growing together. Ann Arbor is home to the University of Michigan and it enjoys a great relationship with the college.

Here at the Kathy Toth team we have been in the business for 20 years and know the Ann Arbor real estate market inside out! We also use various new internet based services to assist our clients in ensuring they receive the highest level of service. (See our testimonials on Youtube or add us on Facebook)

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The University of Michigan Health System (UMHS) is making a great impact in Ann Arbor and throughout the state.  Recently they reported that through charity care and contributions to community health plans, they provide a community benefit of approximately $323 million.  The largest portion of this benefit goes toward unreimbursed direct patient care.  Much of these funds go toward supporting the uninsured and those on Medicaid and Medicare.

The University of Michigan Health Care System is supporting the community with more than just dollars.  They also foster many community health education programs and health screenings, provide meals, and improve housing.  Washtenaw County residents benefited directly in 2008 to the tune of $43.8 million.

UMHS mission is to be “a leader in research, education and patient care.”  They draw much needed research funding to Michigan’s economy and help to provide care to hundreds of thousands of patients each year.  More than 30% of U of M Med School graduates stay in the state to practice and care for our residents.  What a great benefit and blessing to our community.    

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The University of Michigan recently ended an 8-year capital building campaign, “The Michigan Difference”, raising them a stunning $3.2 billion.  They trumped their goal by $700 million in the four year period – a 28% overage.  The money will support 191 professorships, 1,969 scholarships, new student programs, groundbreaking research and 22 building projects.  U of M campaign success is believed to be the greatest achieved by a public university to date.

The Michigan Difference was founded to support five core university values and activities:

1. Fulfilling the promise of science and technology
2. Enriching the student experience
3. Inspiring a life of arts and culture
4. Advancing health and society’s well-being
5. Preparing leaders for the local and global community

In 2008, the Michigan Difference had a large impact on university life:

• $545 million was made available for student support and endowed scholarships
• Endowed professorships increased by 69%
• New construction and building projects across campus with a sampling including:  the Ross School of Business, Weill Hall, the Biomedical Engineering Building, the Children’s and Women’s hospital, the baseball and softball complex, the Walgreen drama center, and the expansion of the Kelsey museum.

According to President Mary Sue Coleman, “donors’ gifts keep Michigan accessible to scholars from a range of backgrounds, populate our classrooms and labs with outstanding faculty, fund exemplary programs and research and build state-of-the-art facilities.”

The University of Michigan is a solid pillar of our community, we can be proud that they achieved and far exceeded their goals!

Ann Arbor student housing will get a leg up this spring as new units such as 4 Eleven Lofts and Zaragon Place come online.  Although some consider these “luxury” options, doing the math may surprise you.  New units at 4 Eleven Lofts offer monthly rents ranging from $750 to $1,450.  According to some students, it can cost about $1,200 a month for room and board in the dorms – often times with locations far from central campus. 

The units at 4 Eleven Lofts include upscale finishes and furnishings as well as utilities, cable and internet.  On a per person basis the cost to live there is either comparable or less than room and board in the dorms.  They also provide students with the opportunity to pay management directly per person making it very easy to manage living with a roommate.  Amenities include a 10th floor lounge with pool table and workout center, 24-hour security and an option for underground parking.  The Lofts are located on Washington Street only two blocks from the main campus at U of M.     

Zaragon Place offers two, four and six bedroom units ranging from $2,500 to $6,000 per month.  Another option on North campus, The Courtyards, provides one to four bedroom apartments with options from $669 to $1,169 per month.

According to many students, Ann Arbor housing has always been pricey but the quality has never quite met the standard.  Students are excited by the new opportunities coming to market. 

My daughter is an intern at Tufts and when we looked for an apartment in Boston we had to use many agents and coordinate appointments all over the place – walking everywhere. 

In Ann Arbor you need to make one phone call and we can help you find your perfect lease situation or purchase.  The Ann Arbor Real Estate Experts know about your hectic schedules and how important it is to feel that you have suitable housing arranged. We will tour you through your options when you come here to make the most of your time here in Ann Arbor (TreeTown).  Maybe you or your friends want to look together, we will put you in the car and get you into some properties so you can see and feel your options. One address is all you need to search Ann Arbor real estate.

If you are looking at rentals, just use no minimum and maximum $10,000 in the web search provided.  I suggest you start with the area closest to the Hospital  AA NE & North Campus.  Call us 734-669-0337.  We KNOW Ann Arbor and are here to help.  We are experienced in helping  Ann Arbor interns and cannot wait to meet you. 

A quick U of M link you may want to browse:  http://www.med.umich.edu/hhc_list.htm

The University of Michigan is by far the largest property owner in the City of Ann Arbor.  With its tax-exempt status, and the recent purchase of the 177 acre Pfizer complex, some are beginning to wonder whether the U contributes enough to the city’s bottom line. 

Without the Pfizer complex (a $108 million deal planned to close Summer 2009), the University owns approximately 15% of the property in Ann Arbor.  Although the university is mindful of this affect on city tax coffers, the fact remains there is an affect.  They have made an effort to sell unneeded properties in the last few years to put them back on the tax rolls, these dealings amounted to about a $2 million increase in taxes for local government since 1990.

U of M properties are used for varying reasons and are located all over the city.  Although these properties are tax-exempt, U of M does significantly contribute to the city in other ways:

• They cover 50% of the cost to maintain roads in and around campus
• They spend a significant amount on rent and utilities for the North Campus fire station
• They pay the Ann Arbor Transportation Authority to provide free service for U of M passholders
• They offset education costs for local children

They also contribute to the vitality and intellectual prowess of the city which is a major draw for the area.  At the same time the Pfizer complex tax loss amounts to about $5.4 million a year.