The College Board reports that the average cost of room and board in 2015–2016 ranged from $10,138 at four-year public schools to $11,516 at private schools.
~ Via COLLEGEdata
Sanpete County is blessed with many opportunities for affordable housing, so it can be enticing for families of Snow College students to consider purchasing a home in the area. But before you start looking at homes on the market, take a second and consider potential concerns when buying a home for your college student.
Concerns When Buying A Home For Your College Student
Buying a home that will be part residence for your son or daughter and part rental or investment property can be confusing. You will have a lot to mull over, including other possible boarding options for your student. Aside from price, here are some other concerns you should have before you take the plunge.
Top concerns to evaluate:
- Do you plan to rent part of the property out, essentially making your college student a new landlord? If so, make sure they are prepared to handle tenants, make repairs, and collect rent. You may also want to consider the fact that your ultimate goal should be good grades and job placement, not just an education in property management for your college student.
- Can you compete with other student housing rentals in the area?
- What is the plan for tenancy during the summertime? Most students return home when school is not in session.
- Even though your student may be at the school for as short as two years, most people that buy properties won’t recoup the losses of closing costs and selling fees for over six years.
- Is it a long-term investment or a short-term solution for your college student? If it is short-term, you need to look very hard at the market to see what the home may be worth in two to four years. It may help if the property can be upgraded during the ownership period to get you a jump start on appreciation.
- Look at homes as though you were looking for an investment property. Try to find cash flow positive properties from the start.
- A project property that is restored during your student’s time at college may be a good option for the future. Students are likely to move once they settle into a profession after school. Many families sell their updated college properties to help provide a down payment for their college students’ next homes.
- Is it worth having your college student worry about being responsible for the property over focusing on school?
- Make sure you speak with a qualified tax accountant about possible tax breaks or consequences.
Sanpete has always been a low supply rental market. As such, rentals are snapped up fairly quickly, which will already put you at an advantage. But what it really comes down to is: Can your college student handle the new home and managing renters while in school? If so, then start looking for investment properties.
Lucky for you, I have worked with many investors in the past, and I can help show you properties in a reasonable price range that will make good rentals for after your college student moves onward. In fact, I currently have two rentals of my own.
Do you have any points to add on the topic of buying a home for your college student? Let me know in the comments.