Is this legitimate? Why would Texas offer a program like this?
Establishing Texas residency is a legitimate and legal way to qualify for in-state tuition.
Texas Education Code (TEC) Section 54.052 authorizes persons classified as Texas residents to pay in-state tuition, a rate of tuition that is generally three times lower than for those classified as nonresidents.
The State of Texas does not have an income tax; instead, tax revenue is generated by property taxes. By incentivizing out-of-state families to invest in Texas, the tax base grows and the property values rise. It’s a win for everyone involved.
The University’s Office of Admissions Texas Residency page details Texas residency classifications and the requirements for establishing domicile in Texas as permitted by Texas law.
Who is Chesney? What is Tower Realty?
Chesney Coker is a lifetime Austinite who attended UT engineering school as a Phi-Gamma Delta member and is now the owner/broker of Tower Realty. He has witnessed firsthand the development of Austin from sleepy college town to major metropolitan city.
Chesney has been a full time agent since 2004 and founded Tower Realty Austin in 2006 to help out-of-state UT Austin families lower tuition costs through real estate investment.
Since then, with Chesney’s leadership, Tower has established itself has a leader in the off-campus housing market. Chesney has ranked in the top 5% of all agents (11,000+) from 2011-2019. In those years alone Chesney successfully completed over 560 transactions.
Can I talk to someone who has done this?
Tower Realty has helped over 1,000 families qualify for in-state tuition through a purchase of real estate in the UT Austin area. Introductions to families who can give you comfort in the process and outcome is a routine part of our sales process, and we are happy to coordinate a conversation.
How does TX residency work? What steps do I need to take to get my child residency in Texas?
Generally speaking, there are three steps:
- You purchase a property in Texas.
- You establish the property as your students primary residence.
- After 12 months you apply for reclassification.
Of course, within each of these steps there are tasks and logistics to coordinate, and Tower Realty has ushered many families through the process. We are with you through the entire journey, from choosing the property, negotiations, the closing, the property management and maintenance, all the way to qualifying for in-state tuition rates. Tower Realty is the Texas residency expert for UT Austin area students.
Does my child have to live in the property?
Typically UT Austin freshmen choose to live on campus, which coincides with the 12-month period required for establishing domicile. Tower Realty helps owners find qualified tenants for renting or leasing the property, as well as collect rent and troubleshoot and manage property maintenance issues.
Once your student establishes residency (typically coinciding with their sophomore year), they have the option to live in the unit they purchased.
What are the other costs associated with owning this property?
Aside from any mortgage on the property, owners can expect to pay for routine repairs to their property, as well as yearly real estate taxes, homeowners association dues, and supplemental insurance (if wanted).
How is the property managed?
Tower Realty manages your property, from finding tenants to collecting rent and paying utilities. We handle all the contracts, repairs, and upkeep. You won’t have to worry about your property when you buy from Tower.
Can this law change and I lose my investment?
According to the Texas Higher Education Coordinating Board, the number of students who met statutory requirements for establishing Texas resident status for in-state tuition under TEC 54.052(a)(3) totaled 25,930 in FY 2017, or 1.5 percent of the total enrollment at Texas public institutions of higher education.
Given the relatively small percentage of students who are obtaining Texas residency by these means, we do not anticipate a threat to the statute.
This issue is a state issue, not a university issue. As long as everyone is benefitting it will remain. Texas legislature only meets every other year. Changes to the existing law would have to be introduced as a new legislation, voted on, and then implemented, which is not a fast process. If you are reading this you would be grandfathered into the current requirements.
How is the Austin housing market?
Austin is ranked as the number one city to live and retire, according to U.S. News & World Report, meaning that the real estate demand is steady, particularly in UT Austin neighborhoods. Tower Realty has brokered transactions throughout the year, most notably in the spring and summer months bookending the academic year cycle.
Will I get a return on my investment? Is this guaranteed?
While real estate markets have inherent risks, and no investment is guaranteed, there is sufficient and steady demand for properties in the UT Austin area, and Tower Realty has helped many families sell their condo once their UT Austin student has graduated.
What if my child doesn’t like UT and wants to transfer?
Most UT Austin students are drawn to the UT Austin for its sense of community, natural beauty, and diverse population. Add to that the fact that U.S. News & World Report, 2019 ranked Austin #1 for Best Places to Live, and UT Austin as #12 Most Innovative School, and you have a winning combination for college life. In the few cases where a student has not found UT Austin a good fit, Tower Realty is able to either rent or sell the property given the steady demand for off-campus housing in the UT Austin area.
Chesney explains the Texas Residency process.
Chesney takes you through the details of Texas residency and qualifying for in-state University of Texas tuition through investment property.