Is the area around the college appreciating?
Research the area where the school is located to see if it has suitable housing at a reasonable price and compare other local properties to see if they are appreciating. This will help you gauge whether this is a good investment. A local real estate professional can clarify rental demand and home price appreciation in that market.
How many family members and friends are planning to go to the same college?
If you have several children bound for the same college within a certain period of time, it may make economic sense to buy a home for them to live in instead of paying rent or room and board.
How can owning a home help with tuition fees?
Some out-of-state students can establish residence by having their parents purchase a home for them to live in, enabling them to avoid paying substantially higher out-of-state tuition fees.
Will there be a steady supply of tenants?
A home with several bedrooms makes it possible for a student to have friends move in and pay rent. This can generate income above the mortgage payments, making a nice return on the purchase price.
How can this affect my child’s credit history?
You can include your child’s name on the contract and loan. There are many first-time home buyer assistance programs that make it easy for students to qualify. This will also help the student establish credit and enable the parents to get a lower loan rate for the home than the rate they would have had to pay on a loan for a comparable investment.
How can I educate my child to be a responsible homeowner?
Putting the child’s name on the mortgage should ensure that the child can handle the responsibility of homeownership and encourage him or her to treat the property, well ... like it is his or her own.
Anne-Marie McKenzie is a Realtor with Coldwell Banker Residential Brokerage in Yarmouth. She works with buyers, sellers and investors and teaches free buyer classes. Contact her at 847-1725 or AnneMarie.McKenzie@NewEnglandMoves.com.