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05/08/2005: "Buying a Home for a College Student vs Paying Room and Board"
Happy Mother's Day everyone!
If you're a mom (or dad) with a child about to head off to college, I just stumbled on this interesting article from Realty Times discussing the pros and cons of buying a home/rental property in the college town for your child to live in verses paying room and board to the college.
The idea can be a solid one (I had a friend who did just this actually). Instead of paying thousands of dollars to the college for housing, you take your money and put it into a mortgage on a home or condo. When your child leaves school, you have the ability to get some of your money back on the sale of the property. Plus, if you bring in additional renters, you might even offset some (or all) of the costs of college. The article is titled, "College Housing Investing: Room And Board Is A Terrible Thing to Waste," by M. Anthony Carr. It can be found at: http://realtytimes.com/rtcpages/20050506_roomandboard.htm
Overall, I think it's a great article, but the one point I think the author forgot is that buying a property for your child might be a better decision on the 2nd or 3rd year instead of the 1st. Although you “loose” a year’s housing expenses and the home equity you might have built, college students are more prone to drop out or transfer early on in their career. It could be a real worse case scenario to buy a home “Junior” only lives in for one semester and then you are forced to deal with a remote rental property.
Let me know if you find this information useful.
Sid Cameron
