5 Reasons to Buy a Property for Your College Student
As both a Realtor and a parent of a high school student, I’ve been considering how to make the most of our college savings. When college choices loom on the horizon for you, consider purchasing a home or condo for your children to live in while they’re away at school. This is a suggestion I’d make to any family who can afford the fees, since room and board charges range from $5,000-$15,000 per year.
Here's why:
Pay Yourself – If you can afford the down payment on the second home, your monthly fees can be about the same as a boarding plan. If your student wants a roommate or two, even better. The roommates can pay you rent, and market rate rent may make up most or all of your mortgage payment.
Security – If a parent is choosing the location or building, you’re looking for a safe location in a building with security features you approve! There’s also the security of knowing where your child will be living for several years, not just one.
Twelve Month Occupancy – Your student comes home for the summer? No problem! I’m sure he’ll know someone staying for summer classes who will need a place to crash. Rent the unit out and cover your mortgage payment.
Build Equity – In a rising real estate market, not only are you paying down your mortgage, but the property is also gaining in value while you own it. Your personal home is one opportunity to gain equity through real estate ownership, but your student condo is another.
Gift a Starter Home – If your student is staying in the same city to work after graduation, you can introduce your child to the responsibilities of home ownership. Gifting your child the property may have tax benefits, and also provides a starter home with what is likely a reasonable monthly payment.
Need a Place in College Park?
At the University of Maryland, the Room and Board rate is $12,809 per school year, or about $1,420/month. If you consider a condo in the mid 200,000's, you’ll find the monthly payments to be similar with a 20% down payment.
With this option, college may end up not costing quite as much as you thought!
More Information
If you would like to search for a home for your college student, please contact me.