Should you buy a house for your college student?

If you’ve been to a college campus lately, you probably left with a strong impression that college life has really changed. Climbing walls, cafes serving up lattes and mochas, dorm rooms with bathrooms, a cafeteria with the selection of a food court and more have made college life a far cry from the scrappy days you might remember.

Of course, once you see the tuition bill, you start to understand where these amenities are coming from.

All this leads to the big question we want to answer in this blog: Should you buy a house for your college-aged child?

Your gut response is probably no. With all the goods and services colleges already provide, why spoil them more? Plus, buying a house on top of potentially paying tuition might seem like a ridiculous extravagance. 

Actually, one of the main reasons you should consider buying a home for your college-bound child is financial.

No matter what your age or where you are in life, when you rent, you get nothing back in return. The monthly checks you write don’t go anywhere, they don’t build any equity and once you move out, you’ll never see that money again.

You see where we’re going with this?

How it works

Most college students live their first year in the dorms, which is an experience in itself. After this, they might live three or four years in off-campus housing (i.e., large, drafty houses with negligent landlords).

The idea behind buying a house for your student to live in is quite simple: Instead of sending a monthly check to that landlord, put them (and yourself) in a situation where, over the course of three or four years, you are building equity. What’s more, if you find a house with multiple bedrooms, you now have a house where your son or daughter can live with several of their friends who pay rent, and in doing so, these friends cover the overall cost of the mortgage.

Yes, this kind of makes you a landlord, which you may not have ever wanted, but you’re keeping it in the family, so to speak. You’ll be responsible for repairs and upkeep, but the situation will be quite different than if you owned a property you needed to rent out indefinitely.

Once your son or daughter is ready to move away or move out, you choose what to do: sell or keep renting.

This plan of action doesn’t work for every family, but for families with multiple children who will be going to the same school, it can be a great investment that can potentially save you thousands of dollars.

If you have questions about the many possibilities involved with owning a home, contact a Coldwell Banker Hedges Realtor® today. With years of experience, they know houses and can help you with any of your buying or selling needs.

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