Housing The Future -- Buying A Temporary Home For Your College Student

If your child is headed off to an out-of-town college, you're probably thinking about ways to reduce the costs of the next four years or more. Since room and board can be some of the most expensive parts of the college experience, minimizing these expenses can give you a big financial boost. This is why many parents consider the advantages of buying a house or condo for their student to live in while attending classes. But, is it right for your family? Here are 4 ways to find out.

How Long Will You Keep it? Obviously, the goal of a college housing unit is to keep it for at least four years of schooling. However, if your child isn't fully committed to completing their education at this particular school, you may not want to risk having to sell the house early. Selling early can mean losing money and adding stress to your life, so it's worth discussing as a family before buying. On the other hand, if you have multiple children who will probably be attending the same university, you may be able to make use of the house for a decade or more. In addition, will you want to keep the home as an investment property or sell it and get out of the landlord business? 

Will There be Roommates? Unless the unit is a one-bedroom town home, condo, or apartment, you will likely have space to take in an additional renter or two. This can help your bottom line tremendously, since their rent payments can pay some or all of your mortgage. But, it will require you to be a more official landlord, file taxes on the income, and treat the roommates as paying customers. If you decide to include other students in your home, be sure to sign a lease with each of them and talk with a tax professional before starting. 

How Responsible is Your Child? If you buy a home that's far away from where you live, your child will need to be the primary caretaker for the house and property. This calls for a young person who will be reliable about noticing and reporting problems, doing regular maintenance, and avoiding unnecessary damage to the house. It's a good idea to realistically assess how likely it is that your student will be a good "renter" and keep the property in good order. If you're not sure, you may want to talk with your real estate agent about other low-maintenance housing options or property management services. 

Who Will Own it? Some parents may see this as a good chance to get their child's credit off to a healthy start and give them some money in the bank. Some banks offer special mortgage loan programs to help students get a loan with a co-signer. And the appreciation on the home can be the start of a solid nest egg when they graduate. However, co-signing on any loan carries risks, so be certain that your own finances can handle the possibility of any losses. 

By answering these questions before you talk with a real estate agent, you can determine what type of housing -- if any -- you want to buy for your college-bound kid. And then, you can make the best choice possible for the entire family. Contact a real estate agency like Sea Pines Real Estate - The Cottage Group for more information.