College.... What an exciting time of a young person and a parents life. The applications, the acceptance letters, the campus tours, the financial documents, scheduling the classes, buying the books, the hellos, the goodbyes, the meal plans, the search for suitable living arrangements, the lists of "to do's" are seemingly endless.
Most students (or mostly their parents) prefer the student live on campus or in the dorms at first, until they are familiar with the campus and the neighborhoods around it. During the first year, research can be done to locate the most desirable area in the desired price point, a favorite complex or neighborhood that which is most convenient to campus for the occupants. It may be possible when purchasing a property in a college town to not only defray some of the costs of living on campus in a dormitory, but to potentially help build credit for the student and to potentially profit from the tax benefits of an investment property. (You'll definitely want to talk with your Tax Professional about any tax benefits.) Another thing to keep in mind is that potentially additional roommates would help pay that mortgage. It was in further exploring this avenue for those of our children and/or college bound students who seek the flexibility of living off campus the concept of InvestADorm (aka: Inve$tADorm) was born.
We will be happy to recommend licensed, professional Realtors who work in and are familiar with the college town in which you are contemplating this endeavor. You can ask them to over the benefits and challenges of college town real estate ownership. You should also discuss this with your personal Accountant or Tax Advisor.
Some of the discussion points of your conversation may be:
*Rent vs. Buy in College town
*House vs. Condo vs. Townhouse (Homeowner's Association & Condo Fees)
*Discuss how it may assist the Student to establish credit by having his/her name on deed and mortgage (in addition to co-borrowers - if any).
*Have additional roommates basically pay this mortgage with their rent contribution. Oftentimes the roommates' fair share of the rent will cover most if not all of the mortgage. In many cases the student will more than likely benefit from their own reduced monthly payments.
*Who will be responsible for maintenance of the property on a regular basis? Will you require a property manager or is the student able to handle this responsibility?
You will want to seek advice and consider whether you would retain the property as a rental investment property and continue to rent it after "your" student graduates or moves on, or if you will more than likely sell it and satisfy the mortgage. Depending on your ultimate goals, the purchase, mortgage, etc. will be structured specifically. In this light, it's best to "begin with the end in mind" to achieve the optimal benefits of this endeavor.