We all know that the cost of education is rising and believe it or not one of the largest college expenses for families is room and board.
The first step is to understand the housing market near your child's university and understand how prices of homes compare to rents.
We would suggest determining how housing supply affect home prices because some markets may be on the verge of a housing bubble as short supply rapidly drives prices up. If this is the case you will probably be overpaying for a home that depreciate if the market cools down the road.
Another thing to consider is that you could treat the home as an investment by renting out rooms. If your child uses one-third of the house and you rent two-thirds to classmates or other tenants, then one-third of the rent is earned in savings and two-thirds is earned in actual rental income.
You should also consider these factors:
- Is your child equipped for home ownership?
- Do they have the maturity to maintain a home and manage the costs, such as repairs, home furnishings, exterior care and general maintenance?
- Will they miss the communal experience of dorm life, or will the skills developed in running a rental business be more valuable in the long run?
This is not a decision to be taken lightly, but it is something that is often an overlooked option for parents who need savings as the cost of education increases.
Contact www.SoCalLifeRealtors.com for all your real estate needs!