The student housing market has been evolving over the years and there is a new emerging trend happening near college and university campuses across North America. Parents have been buying properties for their post-secondary school-bound children to live in while attending school.
Here are some major reasons why we are seeing consideration by parents for this trend.
1. Cheaper Accommodations – In some areas, paying the mortgage and utility fees for a home can be less expensive than paying on-campus accommodation fees or off-campus housing rental rates. Roommates can also help share costs.
2. Reduced Expenses – Annually, tuition and on-campus residence fees can often be on the rise. Because of this, some parents choose to purchase a home for their children to ensure fixed housing expenses for the duration of the student’s post-secondary career. In addition, some academic institutions offer local tuition fees that provide a reduced rate for residents. By owning a home in the area, students may be able to take advantage of these savings.
3. Stability – By purchasing a home, students will not have to worry about wait-lists, application deadlines for housing or looking for a new accommodation every year. There is no obligation to move during the summer months or vacate the dormitory on holidays. Parents also have an added bonus of eliminating hotel costs when visiting their children.
4. Skills Building – Maintaining a home can teach students many new skills, including investments, money management, paying bills and property maintenance. Some students can learn about loan programs tailored to a first-time homeowner, if applicable, with the support of a relative.
5. Return on Investment – As graduation approaches, parents can decide whether they want to sell the property or continue to rent to other students attending the college or university. By renting out the home, parents are able to gain an additional form of revenue, as well as appreciation in the building, until ready to sell.
Before parents purchase a home for their college or university-bound children, they should consider a few important things first.
A. Level of Maturity – With real estate comes responsibility. Making sure the student is mature enough to handle what comes with owning a home is a key factor for this choice. Maintaining the property and ensuring the integrity of the real estate investment is how to make the purchase a positive financial decision.
B. Market Characteristics – The market trends for the area surrounding the school are important to consider. High vacancy rates may mean a more difficult time finding a roommate or another tenant after graduation. Low vacancy rates may suggest a good market to own a rental property in.
C. City Requirements – Are there rental regulations or zoning requirements for properties in the college or university’s city? Do rentals need to be inspected and certified? It’s important to research and know the city’s requirements before purchasing a property.
SEE ALSO: Is Buying Student Housing For Your Children A Good Investment?
The Places4Students.com Team