More parents buying homes for college-bound
Kid going to college soon? Be prepared
to pony up thousands of dollars for apartment or dorm costs, then
have zip to show for it at year's end -- except for maybe a mini-fridge
and a lament about poorly matched roommates.
The tuition dollars, at least hypothetically, will
pay off some day. But the room-and-board bucks? Gone into school
coffers or some landlord's bank account.
However, some savvy parents around the country
are starting to examine that equation in a different light. As home
values continue to spiral and interest rates remain at historically
low levels, some moms and pops are buying homes near college campuses
for their students, often renting out excess bedrooms to buffer
Realtor Wally Berger of ERA Boston
Real Estate recently got a call from a couple in Westchester, Conn.,
who have a son who would be attending med school at Boston University
for the next seven years. The couple flew into Boston very early
one summer morning for a one-day, whirlwind tour of homes and condos
around stately B.U.
"They looked at 14 properties and by 2:30 in
the afternoon, they said, 'We'll take that one.'" They chose
a condo with a price tag of $450,000 and departed for the airport.
"It was a no-brainer for them," says Berger.
"By the time their child is out of school, they can sell and
put $50,000 to $75,000 in their pockets. They know they're not going
to go wrong. And they don't have to waste money on an apartment
or dorm all those years."
It was the fifth such college-area transaction Berger
has made in six months in the Boston area, which boasts Harvard,
M.I.T., U. Mass., Boston College and other prestigious schools --
and lofty rents ranging from $1,500 to $2,000 per month. "If
you're going to spend that kind of money, then why not buy a place?"
Dorms no nonger the norm
The parent-as-landlord practice is not a new one in college towns.
John Moss, a broker associate with a Coldwell Banker
Residential Brokerage office in the Southern Methodist University
area of Dallas, bought condos for each of his two daughters in Waco
in the 1980s near Baylor University, but barely broke even when
it was time to sell.
However, Moss and numerous other brokers are seeing
a strong uptick in such sales. In the course of just a few hours
following an informal Coldwell Banker e-mail query, at least eight
of the company's Dallas-Fort Worth area agents said they'd handled
similar deals recently.
Moss sold one fast-appreciating house directly across
from SMU to a couple whose daughter plans to study at least four
years there. "They saw the right house in the right location
... and ideally, they will rent part of it to other students and
keep it for investment when she finishes."
Agent Rebecca Pearce, Moss' colleague, brokered a
house to a couple who co-signed with their daughter, a Texas Christian
University student in Fort Worth, who in turn rented out three bedrooms
of the campus-area home and kept the fourth for herself. The rent
fully covered her monthly house payment, Pearce says.