Is it a Good Investment to Buy a Home for Your College Student to Live In?
Is it a Good Investment to Buy a Home for Your College Student to Live In?April 25th, 2019 by Karen
Your child is going off to college and dorm costs are very high. You are considering other options such as renting or even buying a home for your college student and a roommate to live in. It’s located in a college town and the numbers make sense, but the main concern is, it will be college students living there!
Is it a good investment?
College/university rentals can make great investments. There will be an ongoing demand as new students are constantly flowing in. It saves money up-front over dorms and paying rent to another party. You could be gaining appreciation and receiving tax benefits for owning a rental property. The resale in college towns is also very good.
Things to Consider
However, there are some risks with renting to college students. They may not have the responsibility to pay their rent on time, they may not have good housekeeping skills or not know how to properly up-keep a home. Here are some tips to reduce the damage and minimize your investment risk.
- Invest in a regular cleaning service
- Have individual leases for each roommate. Have parents sign/co-sign and include utilities (with cap)
- Try to synchronize the lease terms with the school calendar
- Collect higher security deposits
- Require renter’s insurance
- Consider a property manager to provide a layer between you and your child if necessary
If the numbers work out and the home is in close proximity to a reputable college or university, it should be a good investment. It could save you a ton of money while building wealth through equity and potential cash flow. Let’s chat about your particular situation!
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