It’s not as expensive as you think.
Or, it is expensive, but so is college. College Board estimates that the average room and board at a public university is about $10,000 a year. At a private university, the average room and board is nearly $12,000 a year. With those kinds of numbers, it’s no wonder that many students are opting to live off campus. But off-campus rentals can be pricy too, with costs inflated by the demands of so many interested students. In such cases, the cost of purchasing a new house is competitive with the cost of renting.
It’s an investment for the future.
Today, kids are leaving college laden with debts, uncertain of where they’re going to go next. With a home, you’ll eliminate one source of uncertainty. Many college grads elect to live in the same town they went to college in after graduation. They find it easier to find work there, thanks to connections through their school. Plus, they’re much more likely to begin the job hunt in school if they know they’ll be living in the neighborhood afterwards.
Do the math.
To determine if this course of action is right for you, you need to do some number crunching. Look at the cost of housing at your kid’s college, factoring in any financial aid you might be receiving. Then, look at the housing market in the area. How expensive are the houses? If you find any houses well suited to your price range, consider their locations. Will your child be able to walk or bike to school? How close is the supermarket? Will your child need a car? All these factors go into the cost of owning a home off campus.
Consider the downsides.
There are lots of advantages to buying your teenager a home. But consider your particular situation carefully before making the decision. Of course, in some cases the cost of a home may not be worth it, even considering the cost of college room and board. This is especially true if your child is receiving significant financial aid. Some colleges don’t allow students to live off campus, or require students to live in school housing.
Also, how common is it for students at your child’s school tto live off campus? At schools with a strong dorm culture, students that commute may feel isolated from their peers, especially if their homes are not easy walking distance away.
Finally, ask yourself: how likely is your child to stay in the neighborhood after graduation? Some recent grads enjoy the instability of the years immediately post graduation, because they get to experiment with different jobs and living situations. Some might want to travel or take up a fellowship in another country.