Purchase your childrens college living space instead of Renting for years.

Real Estate Agent with Taking a break

This is not a new trend but many parents are not taking advantage of the market.

Looking into home investments for your college bound children.

Rents for apartments and homes have gone up while at the same time real estate prices have come down.

If your budget permits you to be creative, I would like to suggest a way to provide a place for your child to live while in school and position yourself in a market that is more attractive for buyers at this time.


College Children rents for 4-5 years ( hopefully). Avergage cost in Oregon $45,000 roughly for a single bedroom appartment. This could very well go up over the next few years, I honestly do not know. But for 5 years that is a chunk of change.

Investment property could be a very nice solution instead of throwing money away on 4-5 years of your childs housing with no return at the end. Consider the purchase of condo or house close to your childs college.Recruit a roommate  to help offset the cost of the mortgage. Yes there will be extra upkeep on the home but that can be sorted out between your child and yourself. If it can not be worked out then you will have to factor in that extra part. As the owners of the property, you can write off mortgage interest costs to provide a wonderful tax benefit (Talk to you tax advisor for information on how much you can write off.)

CONFORMING  -  (up to $417k)

30yr fixed      4.875%   (5.060apr)   -   Owner-Occupied purchase or rate/term refinance

30yr fixed      5.500%   (5.729apr)   -   Investment Property

15yr fixed      4.750%   (4.940apr)

3/1 ARM       4.600%   (5.023apr)   -   fixed for first 3yrs 

5/1 ARM       5.100%   (5.536apr)   -   fixed for first 5yrs 

30yr FHA      5.000%   (5.439apr)


JUMBO  -  (over $417k)

30yr fixed      5.875%   (6.136apr)   -   up to $600k at this rate, slightly higher to $3.0mil

5/1 ARM       5.100%   (6.111apr)   -   up to $750k with no mortgage insurance

Best to you and yours.

Timothy Butterworth

Real Estate  Broker

Corporate Office

215 SE 102nd, Suite 300

Portland, Oregon 97216 

503-960-4589 Cell

503-287-3417 office

503-287-4657 fax


Brian Belcher
RE/MAX Executive - Charlotte, NC
Charlotte Realtor

Hey, this is a great post. Buying a home for a college living space is a great idea.

Dec 15, 2008 03:00 PM
Timothy Butterworth
Taking a break - Portland, OR

Brian Thanks for the comment, yeah I like the rewards  after the years go by. some of my close friends did this years ago and had lots of roommates, they made a killing with the market turned. They never paid for their own mortgage really.

Dec 15, 2008 03:08 PM
Paddy (Patricia) Pizappi
Better Homes and Gardens Rand Realty - Pine Bush, NY
Real Estate Associate Broker Hudson Valley NY

Timothy I am actually closing on my son's college house this week.  We will rent out the other rooms in the 3 BR house.  We are close enough to the college to keep an eye on it but if it were further away I would most likely hire a rental agent to keep things in order.  More poeple should think of this option.

Dec 15, 2008 09:39 PM
Tina Merritt
Nest Realty - Blacksburg, VA
Virginia Real Estate

We built a college home for our son when he was 1.  Gives us a place to stay during football games until he reaches college age.  Unfortunately, I love going there so I haven't been able to rent it out.  But with my Libor ARM at just 4%, it doesn't hurt the checkbook too much!

Tina in Virginia

Dec 15, 2008 11:37 PM
Peggy Magnanelli, Frederick MD Realtor

The only problem with this is if the child changes schools during his/her college career.  My son went to one school and played ball for 3 years and realized he was not going to be able to go pro and took a year off attended community college to pick up the courses he had missed while traveling for sports and then went to another school (with a scolarship) to finish the last 2 years. I did consider purchasing a house near the final school but he was only going to be there for 2 years. 

Dec 16, 2008 12:15 AM
Eugénie Eckler
Right At Home Realty Inc. - Oakville, ON
Oakville, Ontario

I would give this advice to my sister since my niece goes to University but I guess it depends where - she goes to school in NYC... nothing cheap there!  You are right though- for some places... this is a great idea.

Dec 16, 2008 01:05 AM
Jim Morrison owner, Home Authority of Massachusetts

Hi Tim

As a home inspector in the Boston area I've seen this trend for years, and always though of it as a great idea. Here in the most densly packed concentration of colleges and universities anywhere in the US, rents for college student occupied apartments run $1500 to $2000 a month. Using the lower figure of $1500 that works out to $72,000 for a 4 year period to complete a Bachelor's program.  And of course, all that rent money is gone forever. I've seen smart parents buying small houses and condo apartments for their college age children, and selling the places after their kids graduate. Most have made a profit, some broke even or lost a small amount of money, but nobody took a hit like the parents paying rent. Even with most of the houses in the Boston area losing value, the condo market has actually continued to rise in reverse of the overall trend. Right now there are bargains galore to be had all over the neighborhoods near the public transportation (T lines) system that carries thousands of students to their colleges and back every day. So, if you know someone with a kid heading off to college in the Boston area to one of our 38 schools, tip them off to this idea.  Jim Morrison, owner, Home Authority of Massachusetts Home Inspections (

Dec 16, 2008 01:12 AM
Holly Weatherwax
Associate Broker, Momentum Realty - Reston, VA
A Great Real Estate Experience

We looked in to this, but the uncertainty in the market around the school made it, at best, a 'don't lose too much' proposition. I also have a very picky daughter...she wants to be in the middle of the community where all of the students rent (units are not individually for sale).  At first we objected to that since we wanted to buy, but in the end, she will probably be safer and have better access to school supplied transportation. We were trying to avoid buying another car, and I think by letting her live in this development, we have succeeded in avoiding that.  We have another child following in 2 years and her plans do not include the same college--if 2 of them were at the same school it would have made more sense for us.

Dec 16, 2008 01:26 AM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Timothy.  Yes not a new idea but a very good option.  In-fact even if you don't have a college student it is a very good investment opportunity as there is a steady stream of new renters in the college towns.

Dec 16, 2008 02:09 AM
Tony and Libby Kelly
Keller Williams Realty Portland Premiere - Lake Oswego, OR

It really is a good idea in this market.  Thank you for pointing that out.

Dec 16, 2008 02:29 AM
John Cope, Weichert REALTORS, Porter Properties, Auburn Alabama

This can be a great situation, but you better look out for some possible problems.

1. Make sure that your child is willing to live in the place that you choose for the entire time they are in college.  Are you willing to make them stay in one place to protect your investment when all of their friends are in a different location?  Also remember that less than 50% of kids actually graduate from the school were they start their education.

2. You have to be willing to treat the renters (roommates) as tenants, not as friends.  If your child is not capable of making the hard decisions necessary to manage a $100K+ investment you should consider a management contract with a good management company (at a cost of 10%).

3. Be aware that college kids are not really good tenants (maybe even your own), because they have never had to take care of a place before.

4. Consider the summers.  Most kids don't plan to be at school during the summers and if they don't come home, you might have to pay rent somewhere else.  Are you going to be able to make your kids roommates pay for the months when they are not at school?  Will the unit be okay if it is unoccupied?

5. Most college towns have a fixed 12 month schedule so if you want to sell mid year you might have a problem.

6. Do you really have the expertise to choose a good house or condo?  A mother's instinct is not always the best way to choose a college condo or house that will suit a kids needs for .the entire time they are in college.  Changes in a college market can be pretty dramatic for reasons that are very hard to predict and often do not match conditions in other real estate markets. For example, the addition of a large apt complex or a change to the college bus routes can have a dramatic impact on student housing in some communities.

7. Is this going to be an investment for you or your child?  Their willingness to help with this process could be dependent on this answer.

8. Can you really afford this?  Make sure that you really understand the true cost of sending a kid to college.  I have yet to meet someone who over estimated the cost to send a kid to college.


Dec 16, 2008 04:20 AM
Randy Miller
Real Estate Specialist at the Pennsylvania Dept. of Transportation - Harrisburg, PA

Just a reminder as mentioned by others in other threads over time: If you're going to buy for the student, look into the FHA Kiddie Condo Program as a low downpayment owner occupied program.

Dec 16, 2008 07:59 AM
Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Timothy - good advice. As always, it isn't for everyone, but it is a good way to save money on housing. Regarding the Kiddie Condo referenced above, look into my recent post. If you kid is going to live in it, it doesn't have to be an investment property.

Dec 16, 2008 08:45 AM
Timothy Butterworth
Taking a break - Portland, OR

Thanks Everyone for you wonderful comments and input.

I agree with you all. Like any situation, the correct answer and solution will depend on the circumstance and parties involved in it. I can toss an idea out but I would never venture to go through the affairs of people to sort out the correct answer for them. Everybody has brought up great pro and cons. As is life we have them every day with everything we do.

Choose wisely and think things out carefully before making a big step.

I know of many parents that thought sending there children to school for the first 4 years was a waste after the grade came back to but as time passed those same children seemed to somehow. Grow up a little.

Best to everybody. Sorry I am be lazy at the moment to write personal thank you's to everyone but know that I Thank you all and really Aprreciate your thoughts.

Thanks FRED

Thanks RANDY

Thanks JOHN


Thanks Gabe

Thanks Holly

Thanks  Jim

Thanks Eugene

Thanks Peggy

Thanks Tina

Thanks Paddy

Thanks Charlotte

And were did your Comment Go Brian? :(

Dec 16, 2008 04:06 PM