You are considering buying an investment for your college student to live in while they go to school. What questions should you ask yourself before making this decision?

A significant amount of money will be spent on housing if you have a child going to college. According to an article published by Education Data Initiative, the average room and board costs can range from $8,000 to over $14,000 per year. The costs vary depending on a two year school or four year, and whether it is public or private school. Those are averages and the actual cost may be higher or lower depending up the school your student attends. Regardless of where your student attends school, housing costs are a significant amount of money. For this reason, many parents consider purchasing an investment property for their child to live in while in school. But is buying an investment right for you?

Does the math work?

Here are some questions to ask yourself before you decide. Does the math make sense? Would buying a property, actually save you money? Depending on the real estate market where your child will be living, does the cost of buying and maintaining a property save you money over the cost of a dorm room?

Renting rooms?

With that question being asked, do you plan on other students renting rooms to cover some of the costs? This is one way a parent might justify the cost of buying a place. Tenants could defray costs. If that is the plan, make sure your child feels comfortable living with whoever has committed to renting there. Also make sure the other students sign a lease. If the tenant/students back out, do the numbers still work or would it be cheaper to have your student in the dorm.

Is your child responsible?

Is your child responsible enough to handle living in their own place and being in charge of it? This can be a growing and learning experience for your student to live in a place and be responsible for the day-to-day upkeep. But it can also be distracting or in some cases, overwhelming. The most important thing for your student is school. You want them to focus and be successful at school. If they are able to learn life skills and school at the same time this might be a great experience for them.

Appreciation?

Another question to ask is regarding appreciation. Will the property will appreciate enough over time to offset the carrying costs and the costs of sale. This question is impossible to predict, but with research you may have a good idea whether you will make a profit over the time that you own the property. One last question to ask is if the property will sell easily when your child graduates. This is another question that is impossible to answer but you can make some educated predictions. Is what you would like to purchase a popular, desirable choice in the real estate market? If the property cannot be sold quickly could you continue to use it as an investment property? Will you hire a property management company to manage the property at that point?

These questions are not intended to scare you away from buying an investment property for your child to live in while in college. These questions are meant to ensure you make a well informed decision. If you feel a purchase is right, be sure to connect with a business savvy real estate agent to guide you, like me! Call Lestel 970-310-8379.