Many colleges and universities are facing room shortages. Rising admissions means few on-campus rooms available for incoming freshmen. Shrinking operating budgets does not permit upgrades or construction of other housing units. Many parents are making the decision to invest in real estate for their undergrad or grad student. The decision depends on whether it makes financial sense, the cost of living in the college town, and the emotional development of your child. Tuition is just the beginning of the costs associated with college.
If you are paying out of state tuition, you may want to crunch the numbers to find out if living off-campus is less expensive than dorms. Rental rates are increasing among apartment complexes. Buying a home instead of renting could prove to be more advantageous in the long run. It is important to understand the risks involved.
Consider costs such as monthly mortgage payments, property taxes, homeowner’s insurance, association fee, maintenance costs, and any additional liabilities. Appreciation of the property depends on the current real estate market in the college town. Researching your options is the most important step in deciding whether investing in property is right for you and your child.
- Your child can charge rent to roommates and subsidize a portion of his or her expenses.
- There is a large inventory of affordable housing available.
- When your child graduates, you can rent out the property to other students.
- You can avoid the increased fees associated with on-campus room & board.
- Overestimating your child’s ability to be responsible. Paying bills on time in an important part of maintaining a good credit rating.
- Being a landlord can be stressful.