Buying a Home for College

A dormitory housing contract is a typical college expense. While it usually includes meals, few people claim that a tiny room shared with one or more students is a comfortable experience. Instead of paying rent for four or five years, many parents have considered the valuable investment opportunity of buying a home for their child when they go to college.

At first you might think that a university education is already too expensive. That may be true. Certainly, if your student is attending on a scholarship, buying a house is an easier investment to contemplate. Nevertheless, a number of factors make home ownership in college a logical step.

First, we are in a buyers market. There will be multiple homes available no matter where your child attends school. Some might even be foreclosure homes available at a potential discount.

Second, most students are now taking five years to complete a degree program. If post-graduate studies will be undertaken at the same university or in the same area, your investment period will automatically be lengthened by one to four years or more. Housing market appreciation during such a period is likely and you could develop a considerable amount of equity in that time.

In addition, buying a house will develop your child’s credit score if you include them on the title deed. It teaches them valuable lessons in home ownership. They can also contribute to the expense from any part-time work they undertake while in school, much as they would if they were renting.

There can also be considerable tax advantages. You can discuss this with your tax advisor or accountant. A real estate agent would also be able to assist you to decide if such a move would work for your family financially.

Most students do not need an entire house to themselves. While siblings may attend the same institution later, further extending your investment value, most children would have roommates if they were renting. It only makes sense for them to offer rooms to other students. This can help finance your purchase and teaches them essentials in maintaining and managing a property. We will address more issues with roommates in a follow-up article.

For the right family and the right child, home ownership while earning a degree is the right choice. Whether the home is larger to allow for more roommates or smaller to allow for lesser expense can be decided based on your finances, availability and the child’s capabilities and personality. So before you sign that lease or dormitory contract consider the option of buying!