Buying a house for college housing

[Anonymous]

We did this. We made about 100k on it after 4 years but of course did have to pay taxes and insurance. Kid was responsible for internet, electricity and food. Most of that was paid for by rent from a roommate.

We bought it by owner (we were the first people who toured it the same day he put the sign out) and we sold it by owner (on the first weekend we listed it!). It was a tiny one car garage home with 3 bedrooms, which are popular in the college town. It was only 3 years old when we bought it, so there wasn't any maintenance needed, but we did still do a lot to it like painting, lawn care, and we replaced linoleum with tile.

The biggest expense was furnishing it, but we had a lot of extra furniture we sent up there.

[Anonymous]

Anonymous wrote:Absolutely not. That is an unfair burden to play on kid #2 to go to the same school as kid #1, and unfair to ask kids to live together vs. grow and live with friends.

I mean I don't think it's unusual for siblings to go to the same college. I went to the state flagship, UF, and everyone wanted to go there. I knew lots of siblings that went. It seemed more unusual for siblings to go to a rival school than to go to the same school.

[Anonymous]

Absolutely not. You didn't way a word about math or you financial situation. You don't know other problems you buy or the neighbors or the neighborhood. And If you think you do, things still can change.
Chances that buying is cheaper than renting for all those years, plus rent increases, and moving even yearly, are 0%.
If it's about money, buy Bitcoin for your kids and they will thank you later. You don't know the crazy neighbor they are going to get.

[Anonymous]

My friend's parents did this when I was in college. The kid lived there three years and they charged rent for 4 other kids to live there. I'm guessing the rent paid the mortgage.

The nice thing about this over a regular rental investment is that the kid is there to take care of maintenance. Not necessarily to DO the maintenance, but to like let in the plumber when one is needed. (But also note that there are maintenance costs in any rental. And I'm guessing you won't want to charge your kid's friends a lot on their security deposits.)

The rule of thumb used to be you need to live in a house for 3 years to break even in closing cost. (Remember you pay an agent up to 6% to sell and also have lots of other small costs -- appraisal and whatnot.)

I would only do if it is literally right next to campus. I want my kids to have a robust campus experience. But if it is as close as they would otherwise live, it is worth looking into.

[Anonymous]

I considered it but in the end decided I didn't want to be a landlord to college kids.

[Anonymous]

My parents did this. I would not expect the two kids to live together. I’d also get at least a 3 bedroom.

[Anonymous]

Anonymous wrote:Many families we know are doing this. Some kids would have both the on-campus dorm and off campus house. Provide a lot of flexibility.

this sounds like the dumbest idea ever!

[Anonymous]

Anonymous wrote:[b]I'd be worried about my son's ability to pull if he's living with his sister. Also, it's probably not the best time to be investing in real estate in the short-term. Look at market trends.

another really great reason! /s

[Anonymous]

Anonymous wrote:

Anonymous wrote:Lots of costs to consider:
(1) opportunity cost of money invested in down payment that could be invested elsewhere
(2) monthly mortgage + utilities
(3) property taxes
(4) maintenance and repair
(5) cost of any months not occupied (summer) or subletting hassles/damages
(6) Selling costs (broker fee, etc)

And finally the (not so subtle) pressure on your younger child to attend that is evident from your post.

This is a good list of costs. But what many posters are missing is that this isn’t a real estate investment. It’s a comparison against the cost of paying dorm fees and required meal plans. If the monthly costs for a place (mortgage + expenses) is significantly less than the costs for a dorm, then you can take a hit on resale and still come out ahead. Also, there could be income from renting a room to another student.

I looked into for my oldest and the reason I decided against it was that most of the housing available was older 1950s home that needed serious maintenance (I wasn’t going to be able to let it be as is.) The one condo building was a possibility (1970s), but there were lots of reports of cockroaches (urban area) and I didn’t want DC bringing insects home.

You forgot the biggest factor, the risk of losing on a large investment. Market goes south and you’re screwed. Water heater breaks, a party gets out of control and you’re not breaking even.

[Anonymous]

It's only worth it if extra rooms can be rented out to fellow students.

[Anonymous]

Terrible idea for many reasons