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Real Estate Pays For College |
The list of college costs can seem countless--ever-increasing tuition, textbooks so pricey they might as well be encrusted with gems and endless incidentals of food, clothing and activity fees.
There's not much you can do to make those expenses less painful. But there is one area where you can soften the hit to your wallet--and if you're lucky, even turn a profit. Invest wisely in housing, and instead of paying for pricey dorm rooms or ratty apartments, you can write a monthly check that boosts your equity.
The cost of housing a college kid keeps going up--according to The College Board, which puts out an annual report on college pricing trends, the average room-and-board expenses for undergraduates at private schools in the 2004 to 2005 school year totaled $7,434, up 4.6% from the year before. Meanwhile, the median existing home price in the U.S. went up a similar amount from July of last year to July of this year. Where would you rather feel the increase?
Before You Buy For Your Student, Ask Yourself: - Can my child handle the responsibility of ownership? This is more often a question of maturity than an issue of chronological age. Some students are perfect for this arrangement at twenty, and some are not ready by thirty!
- Does the city/town where the school is located have suitable housing, at a reasonable price, to purchase? If your child is attending N.Y.U. and wants to live in Greenwich Village, you probably are NOT going to make the numbers work!
- Is property appreciating in the area; is this a "hot" location? With Tempe recently rated #2 among southwestern cities, it is easy to see why homes in this area have risen in value.
- Will there be a steady supply of good tenants? If quality student housing is in short supply, then chances are excellent that the unit will never be without a good tenant.
If the answer to all these questions is "Yes", then you might do well to examine this option. Feel free to contact us if you have any questions.
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Harry F. D'Elia III | Real Estate and Beyond Team