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Buying a house for your child

We've all seen a typical student house: Canadian flag in the window, beer bottles on the lawn from last week's -- or last month's -- party and broken windows here and there.

But that image wasn't a concern for Nancy Lajoie when she and her husband bought a house for their son to live in, while he attended university. "What surprises me is the sense of pride they have where they live -- it's clean, and they even have a schedule to clean the bathroom," says Lajoie, whose son, Kyle, is in his fourth year of agriculture business at Ontario's University of Guelph.

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Investing in a second house hasn't produced a huge surplus for the Lajoies, but they always planned to help Kyle pay for his housing while at school. And this way, he has a little extra cash from the rent his roommates pay to put toward his groceries. Rent from the five tenants covers the mortgage and, in a few years, the Lajoies's younger son will also have a place to live during his studies, if he chooses.

Everything has worked out pretty well, says Lajoie, and she'd recommend it to parents of soon-to-be-students, but there are a few considerations. Not all kids are as responsible as Kyle and not all tenants clean bathrooms. If you plan on buying a house for the student in your family, read on to find out what is involved.

Where and what to buy
When trying to figure out what type of property to buy, a townhouse is a good bet. "For the amount of space, with a finished basement, the price and number of rooms, townhouses are always popular," says Gail Irmler, a real estate agent with Royal LePage Triland in London, Ont. Choose one that has potential to increase in value, so when you sell it, you can help your child pay off any debts he might have incurred during his time at school.

Location is another important factor. Many parents try to buy somewhere close to the school. But depending on the neighbourhood, that might be quite pricey. At the University of Western Ontario, in London, for example, the homes close to campus are older and more expensive than townhouses further away from school.

In Irmler's experience, parents and students are willing to buy outside of the immediate campus area provided they are on a major public transit route and have amenities such as grocery stores close by. So, it's always a good idea to check out outlying neighbourhoods, not just what's within walking distance to campus.

Finding good roommates is key
Lajoie only advises buying a house if your child is responsible. In his house, Kyle isn't responsible for collecting rent cheques, but he does collect each roommate's portion of the utilities. "I can't say he hasn't felt pressure sometimes when he can't get utilities from such and such a kid," she admits, but for the most part, he's kept up his part of the bargain.

She also suggests having your child help find dependable roommates. Kyle initially screened the would-be housemates and then passed them over to his parents for a second meeting. The same tenants have been there for the past three years, and it's a good mix of three groups of friends. Lajoie warns parents to pick wisely: "I recommend not having one group of friends. A couple of pairs works out best, otherwise it will become a party household."

(continued on next page)
-- Posted: Nov. 7, 2005
See Also
Buying a house with a friend or sibling
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Expert Advice: Selling your house for more
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