Investment Properties for College Students

college housingI was chatting with a neighbor – Mike — over the weekend. Mike’s daughter is a senior in high school and looking at a lot of different colleges. Mike is a successful dentist but he is still worried about the economy and the costs of putting his daughter through school, even though he has already pre-paid her tuition through a state investment program.

Mike’s main concern is the cost of room and board, especially if his daughter lives off campus, as he expects she will by her sophomore year. Of course, he also worries about his daughter’s safety and comfort while she is away at school. I suggested to Mike that one way to assuage his fears might be to purchase

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8 Responses to Investment Properties for College Students

  1. lucyprice says:

    If you can afford to buy property near schools and as an investment it is a really good opportunity to make money in the long run. Great article.

  2. Christianne says:

    I understand where you are coming from in this article but I hate the idea. I will admit I’m biased but let me explain why. I have a condo in a new development. The developer is having issues selling the last units so he has rented them out to cover the HOA fees. Many of the renters are young. I’m mid to late thirties so not old-old but lead an extremely busy life (work 2 jobs, starting my own wine blog, going to school). These new renters treat our buildings like a frat house. We used to have a very quiet comminuty. I’ve been woken up at all hours with people congregatting outside to smoke and talk and sometimes puke their guts out. These renters cheapen the community. I speak to them about it and don’t raise a fuss until it’s fairly late. They don’t care. Not every renter is bad but the few bad ones are awful.

    I don’t believe these kids will necessarily treat the condo better because Mom and Dad own it. You’ve put forward a situation where Mom and Dad are covering tuition and worried about housing. Exactly what is the kid covering towards his college education?

    Furthermore, my day job is in finance (CFA). Homes are not a great financial investment. The article misses the tax treatment of the investment and follow-up costs of owning a home. Granted, condos are going to be relatively cheap right now. Who’s to say that you won’t be spending more money on repairs because Junior doesn’t know how to take care of it (or care enough to take care of it because they didn’t work all that hard to get it).

    Again, I realize I am biased because of my personal situation. The article hit a nerve :)

  3. Caleb Nelson says:

    I think that if you have the opportunity to own, rather than rent, you should take it. Like you said, building equity for yourself is always better than building equity for someone else.
    This may also be a good opportunity for a parent to help teach their child start a young real estate portfolio through cosigning.

    Caleb
    http://www.mefinanciallyfree.blogspot.com

  4. Hilary says:

    Are you sure about the credit-building point? I know with credit cards that is not the case (i.e. if you put your kid on your credit card, it won’t affect your kid’s credit at all). This is a recent change due to the fact that companies were forming that would allow people with bad credit to artifically inflate their score by getting a credit card with someone else.

  5. Homebody says:

    Um yeah, we had the same brilliant idea when our OD moved to Oregon and prices were so cheap next to California. We actually built a small home in a new development that 4 years later is now a rental. We will probably come out okay in the long run, but now wish we had not done it. We didn’t want to be long distance landlords. Luckily the tenants are attending the same school as our daughter, are 2 brothers and came recommended by our accountant.

  6. ThiNg says:

    I’m a well rounded, respectful and reasonable guy, but when I lived off campus with 4 ‘buddies’ for a term we did things to that house that would give you nightmares. Let me share some horror stories so you can go into this with your eyes open!

    1. One night we snuck over to a neighbours house and removed all of the storm doors from their house. We then screwed the doors into random entrances in our house – like from the kitchen into the living room!

    2. We had a themed party called ‘Popsicle Party’ and we turned off the heating and opened all of the windows in January (gets cold up here in Canada!) and then we all left the next morning for the weekend (went home) and forgot to turn the heating back on. Voila frozen water pipes!

    3. A friend on the same street came over one night and used expanding foam to seal all of the storm doors on our house so we couldn’t get out of the house in the morning for school (yes, I know, major fire hazard!), I had to climb out of my window to make it to class! It took 3 days of scrubbing with a wire brush to open the doors and I can’t even explain the damage to the metal!

    4. One of the tenants from the basement (didn’t know the guy), used the landlords fridges and freezers (chest freezers) at an outdoor festival for a weekend. They just showed up and took all the appliances, used them (I assume not carefully) and brought them back all dinged up and scratched.

    6. One time, in adjoining townhouses, we drilled holes through the walls to ‘share’ networking, cable, and phone lines. I’m talking about 3 inch holes (we had no craftsmanship skills!) in the basement walls (concrete cinder blocks).

    7. I can’t count the number of stoves, microwaves, etc that have been destroyed. One guy boiled a pot of water and then went to play a new video game. We cam running out of our rooms when the alarms went off, the POT had melted to the stove coils and the guy was still playing his game!

    8. A bunch of drunk guys at our BBQ started a game of shot put in the back using a bowling ball. The lawn looked like a meteor shower zone, and the game ended in the complete decimation of the aluminum garden shed. Picture bowling ball sized holes aluminum swiss cheese.

    Thinking about renting to students? BE A LOCAL LANDLORD.

  7. Pingback: Six Ways to Force Yourself to Save - SavingAdvice.com Blog

  8. Philip Parsons says:

    I think it’s a great idea if you can afford it to get a condo nearby, and ofcourse you can always rent it out on vacation

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