3 Reasons to Consider Purchasing a Home for Your College Student
With the cost of on-campus room and board ranging from $11,000 to $13,000 annually and off-campus housing averaging $27,000 per year, your student’s expenses can add up quickly. When you multiply these costs by four (or more) years of college, the financial burden becomes even more daunting.
But what if you could turn these expenses into an investment? By purchasing a property for your college student, you could potentially save money on housing costs and create a profitable investment for the future.
Buying a Home for Your Student Versus Paying for Room and Board
According to Credible, the average annual cost for on-campus room and board is about $12,680 at private four-year colleges and $11,140 at public, in-state colleges, and these figures can skyrocket depending on location and the institution.
Off-campus housing costs can also vary widely depending on factors like location, type of rental, number of bedrooms, roommates, and available amenities. SharedEasy estimates that the total cost for off-campus living, including food, utilities, cable/internet, and transportation, averages around $27,180 for a nine-month academic year.
Then, don’t forget, you will have to multiply those costs times four—or more—to account for your college student’s full academic career. During that time, the cost of room and board on campus, not to mention the rents off campus, are almost certain to increase annually.
3 Reasons to Consider Purchasing a Home for Your College Student
1) Potential Profit Through Appreciation
One of the most notable benefits of buying a home in a college town is the potential for property appreciation. If you buy in a high-growth area, you could sell the property at a profit when your student graduates, or turn the home into an investment property and earn rental income.
College towns often have a constant demand for housing as new students arrive each year. This steady influx of renters makes it easier to maintain full occupancy and generate rental income. A real estate agent familiar with the local market can provide more information on renting to students and the potential return on investment.
2) Potential Tax Benefits
Buying a home for your college student comes with potential tax benefits, including deductions for mortgage interest, mortgage insurance, and home repairs or updates. These tax write-offs can vary by state and depend on how you use the property.
For example, there are different tax implications if your student lives in the home rent-free versus renting out rooms to other students. Consulting with a tax advisor can help you understand the specific benefits and requirements for your situation.
3) Potential for In-State Tuition
Out-of-state students often pay significantly higher tuition than in-state students. The average tuition at public, out-of-state schools was $29,150 per year in 2023-2024, versus an average of just $11,260 for public, in-state schools.
Some states have guidelines that allow students to qualify for in-state tuition if they establish residency. For example, students in Texas must demonstrate their intent to live in the state and establish residency for 12 months before the first day of classes.
Closing Thoughts
Buying a home in a college town requires careful consideration, but it can be a viable strategy to reduce college-related expenses, ensure your student has a safe and comfortable living environment, and potentially earn rental income.
If you’re considering purchasing a home for your college student, give us a call or visit us online to start your journey towards an investment in your student’s future today.