Alex Edwards, a real estate agent and developer with an office in Codman Square, and his wife Joanna have taken a novel approach to preparing for their five-year-old son Carter’s college fund: They’ve made him a homeowner.
Technically, the two-family property they bought two years ago is owned by an irrevocable trust in Carter’s name.
“We see these kids and they get put in financial prison at 18 years old,” said Edwards. “It’s probably easier now to get a school loan than a car loan. It becomes a situation where school and education will make you work because you have to.
If Carter wants to go to college, let the rent from the house pay for it. Go to college without debt, come out free and clear. If he doesn’t want to go to college, he has a place to live in or a business to manage.”
The parents’ decision underscores both the high costs of housing and higher education in Massachusetts. According to the Greater Boston Association of Realtors, the median selling price of a single-family home rose to $845,000 this April, up from $760,000 in April 2020. The Edwardses paid $490,000 for the two-family home in Everett, a city of 50,000 people abutting Boston.
Massachusetts is also home to numerous esteemed educational institutions, helping the Bay State to frequently top lists marking the most expensive sates in which to be a college student.
Alex Edwards said his own experience as a student at Mass Bay Community College made him think twice. The professor in his business administration class assigned him to go home and buy something that he could treat as a business. Shortly after, he bought his first investment property in Dorchester.
After a stint working in corporate America, Edwards jumped into real estate full-time. He founded Thumbprint Realty in 2016 and saw first-hand the financial pitfalls facing young people in Dorchester and Mattapan — most of it connected to huge amounts of debt created by college tuition.
In a time when many long-time residents are getting pushed out of city neighborhoods, Edwards said something that isn’t talked about is how student loans can be a greater barrier than home prices – particularly for those who have stayed in school to delay paying back loans.
“They’re so excited to take on the world, get a great job, and take vacations,” he said. “In the real world, they get a decent job. It’s not bad. Then they want to buy a home and the bank says their debt-to-income level is too high and they can’t get a loan…That’s when they realize they’ve messed up. It’s hard to do anything about it then.”
By putting the two-family property they purchased in Everett in their son’s name, but in an irrevocable trust, they have spent the last few years with a lawyer working out every contingency.
“I hope he dives into his dreams, and maybe they don’t work or maybe they do,” Edwards said. “I want to give him money to mess up. I don’t want him to feel like he has to get a 9 to 5 to pay back the debt and not pursue his passion…He will have no debt, and that’s what I hope for him.”
Carter is aware that it is his home, and that it somehow is tied to his future.
“Whose home is this?” asked his father on a recent visit. “This is my home; I own it,” he answered with all the seriousness a five-year-old could muster up.
Edwards sees it as a decision that many parents might consider to support their kids – whether that be for going to college, opening a restaurant, or creating the next great invention.
“I don’t want this to be the best thing that happened to my generation, but just the first good thing that happened to my generation – to my son Carter,” he said.
