College-area properties get good grades
By Jay MacDonald • Bankrate.com

Checklist as your teenager heads off to college: Don't forget to: a) pay the tuition; b) have the safe-sex talk; c) have the drinking-and-driving talk; and d) buy your student a house or condo.

Pardon the whiplash on that last one, but the fact is, many parents who are financially able to do so are choosing to invest in real estate close to campus for their college-bound offspring. In many cases, it's preferable to shelling out dormitory fees or apartment rent.

Statistician Walter Molony of the National Association of Realtors, or NAR, estimates there are about 3 million campus houses and condos in America today, properties that were purchased primarily for the owners' college-bound students. That represents about 8 percent of the nation's 37.4 million investment properties, but excludes 6.8 million vacation homes, which don't tend to be near college campuses.

Although NAR doesn't track campus-area housing prices per se, Phillip Filardi, a real estate agent with Keller Williams Realty who specializes in properties near the University of Texas at Austin, will attest that Longhorns with their own digs are living large.

Housing appreciation in 5 university cities (Periods ending March 2006)

City University One-year value change Four-year value change Austin University of Texas 10.9 percent 22.9 percent Boston Boston University -1.3 percent 28.0 percent Los Angeles UCLA 4.8 percent 96.8 percent Miami University of Miami 11.4 percent 102.9 percent Seattle University of Washington 12.6 percent 59.3 percent

"It's amazing the number of parents who are able to come in and buy a $200,000 or $300,000 condominium, or even a $400,000 or $500,000 house for their children right around campus," he says. "I've had any number of parents tell me, 'If I'm going to spend this kind of money every month to house my children, I might as well buy an investment property and get some return.'"

For students, a campus house or condo can offer greater freedom, a choice of roommates and more amenities, including a full kitchen, private bath, deck and hot tub, cable and Internet connectivity, and covered or enclosed parking.

For parents, it offers a chance to not only recoup some of the skyrocketing cost of the aptly named higher education but, if approached correctly, can even launch their baby birds into the world with something college can't provide: a good credit history. Even parents of limited means can derive many of the same benefits by co-owning a campus house with other parents.

One additional bonus: That campus crib might keep the kids from "boomeranging" back home, as nearly half of this year's college graduates plan to do, according to a survey by online career resource MonsterTrak.