Why I Bought My 11 Year Old a House…


Hey everyone in “RON AND DON NATION”! I hope you are having a great FALL as our kids are now back in school and HALLOWEEN is here in just a few short days!

If you are like me, you have probably had to head outside to do raking, cleaning, and bagging due to the pretty severe storm we all just experienced in the PNW. As you can see from these pictures, luckily I had some help.

It’s interesting, as I was raking leaves at one of my rentals with my 11 year old son this past weekend, I thought about an interesting fact…….

This rental in Queen Anne is actually owned by myself and two of my real estate mentors. Even though my son charged me 25 dollars to help with a full day of cleaning, what he didn’t know is that 50 percent of this house will belong to him someday.

Not only will he own part of it, this home will be used as the vehicle to pay for his college education. Or maybe to send him off to trade or tech school or even start his own business.

Who did I learn this from? I learned it from one of my business parters who is a very active investor, developer, and real estate owner. He is also a great dad with two kids of his own. Instead of investing in 529 plans, he saved and invested that money in real estate for their college educations. Those rental units are currently paying for both his kids to go to school. He explained that I could go the traditional route, start a 529 plan to save for my son’s future education, or I could consider doing the something different.

So first, what is a 529 Plan you ask?

According to T Row Price, a 529 plan is, “are accounts specifically designed to help you save for education expenses in a tax-advantaged way”. Here’s how it works:

  • You create and control an account on behalf of your beneficiary, or future student. 
  • You make contributions to your account using after-tax dollars. 
  • Any earnings you accrue are tax-deferred while invested and tax-free when used for qualified education expenses.

That means you can use your full balance for expenses like tuition and fees, room and board, and books and supplies at any eligible public or private college, university, or vocational school anywhere in the U.S.

A 529 plan can also be used tax-free to cover certain tuition expenses at K–12 public, private, and religious schools.
Using a 529 can make it easier to save for the future with benefits designed to help you reach your unique savings goals.

For example if you saved 200 dollars a month when your child is born up until they are 18, on average you could sock away about $44,000. In a 529 plan, that number sores to about $77,000.

So, what if you took the money you saved and went out and bought a rental instead, like I did in my son’s case?
Now I have an asset that is currently cash flowing as well as covering the mortgage. I have appreciation as this home has already increased in value by $200,000 since the day we bought it. On top of that I get to write off almost 3 decades of depreciation which is thousands of dollars per year.

And at the end of all of it?


My son doesn’t know this today because I don’t want to him to forget how hard it is to make $25 dollars. On this day he worked 6 hours on three different homes at 5 dollars an hour. I don’t want to hand him something in the future that he doesn’t appreciate because he doesn’t understand the value of a dollar or the work ethic it takes to make one.
So what motivates me?

I remember at 18 years old, running into the house and proclaiming to my Mother that I had just been accepted to the University of Notre Dame! It was a life long dream…. but with only half of a scholarship, I couldn’t afford the other $14,000 dollars it was going to take to start school.

So I never went. I couldn’t go. It’s probably the greatest regret I have to this day.

The power of saving either in a 529 plan or this real estate strategy is something that I didn’t know back then…. but I do know now.

And now, so do you!

Either strategy can be a great way to give your kiddo that extra boost in life.

Sorry we have been off the podcast for a week as one of us was under the weather.

We are back this week!

Reach out if you want to go find that rental!

We love being your broadcasters, your real estate agents, and your friends.

Thanks for trusting us!

Have a great Halloween everyone!


Don O’Neill is a Licensed Agent at
Windermere Real Estate Midtown
1920 North 34th Street
Seattle, WA 98103

When Don is not behind a microphone, you might find him helping clients shop for properties to buy, invest, or sell. As an active investor, Don seeks out properties for long term investments. Schedule Your Sit Don with Ron today!

© Ron and Don Real Estate 2024. All Rights Reserved. Site designed by Alex Hodschayan.

DISCLAIMER: Ron Upshaw, Managing Broker License #22027577 & Don O’Neill, Broker License #95294 are brokers with Kelly Right Real Estate

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