It’s no secret that sending a child to college is expensive. Aside from tuition, room and board make up a sizeable chunk of college expenses. The College Board reports that “the average cost of room and board in 2017–2018 ranged from $10,800 at four-year public schools, to $12,210 at private schools.”
If we take that cost and divide it by the nine months students are in school, it equates to roughly $1,200 to $1,355 per month. Multiply that by four years. If you have multiple kids in college, you can see how quickly the cost adds up. At this rate, it may make financial sense to consider buying a home for your student.
The reasoning for considering whether to purchase a home for your student or pay on-campus housing is similar to that of renting or owning a home.
Some advantages include:
- Building equity in your property.
- Freedom to stay year-round for summer classes.
- The possibility of generating rental income by adding roommates.
Possible risks include:
- You cannot guarantee the home will increase in value when it’s time to sell.
- Responsibility for maintenance costs.
- Required down payment may outweigh cost of dorm deposits.
Other factors to consider are the safety and affordability of your college location, additional transportation costs and the maturity level of your student (getting a taste of semi-independent adult life is a big step for recent high school grads!). Townhomes or condominiums may be a good option because they tend to be lower in price, require less maintenance and the communal living style may offer more safety features and ridesharing capabilities.
To see cities where purchasing may make financial sense, check out Redfin.com’s article 15 colleges where it’s cheaper to buy a condo than pay for a dorm.
By: Marlene Sheard
Marlene is the mortgage marketing representative for Ameris Bank and previous Sales and Marketing President for her local Home Builders Association who enjoys sharing her experiences in the buying, selling, and financing of homes.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.