The skyrocketing cost of college tuition is an investment in your child’s future, but for many parents tacking on the high cost of college housing is often a bitter pill to swallow. According to The College Board, the national average cost of room and board for in-state schools is around $44,000 for four years and higher for private institutions. Depending on the school, this might be a cramped dorm room with bunk beds, a community bathroom, and limited security. Demand for more posh campus housing has made that cost substantially higher at some schools. CollegeFactual.com reports for 2018/19 room and board at Georgia State University is $14,392 and $13,894 at Emory University. As a result, many parents are considering alternatives to on-campus housing.
Metro Atlanta has over 40 institutions of higher learner and is home to several major universities and renowned colleges including Georgia Tech, Georgia State University, Emory University, Clark Atlanta University, Mercer University, Oglethorpe University, Kennesaw State University, Savannah College of Art & Design, Morehouse College, Spelman College, and Agnes Scott College among others. This coupled with a strong real estate market and the population growth the area has seen year over year makes Atlanta a smart choice for parents considering investing in off-campus student housing as both a cost-savings measure and an opportunity to set their student up for life-long success including the potential to graduate debt-free.
9 Reasons to Consider Purchasing Off-Campus Student Housing
A stable home life has always been considered a key to academic success. Helping your student find a location and quality housing that best suits their needs allows you to ensure they have a lifestyle that will set them up for success. Avoiding the hassle of twice-annual moves (one of which coincides with finals!) and storage when school is not in session alleviates unnecessary stress so your student can focus on their education.
2. Fixed Housing Expenses
On-campus housing costs tend to rise every year. A fixed rate mortgage will help you maintain your budget, avoid the hassle of paying security deposits, and the skip the risk of not getting them back.
3. Cost Saving Meal Plan
On-campus housing often comes with a mandatory meal plan that is often expensive, restrictive, or encourages unhealthy dietary habits and the unwelcome addition of the “Freshman 15”. If your student has special dietary restrictions these mandatory meal plans can be even more punitive because you often end up paying for food your student isn’t eating. Save money, teach your student to budget for groceries, and encourage healthier eating habits from cooking their own meals in their new home.
4. Investment Appreciation
If you have siblings a couple years apart who will attend the same school or if your student intends to pursue an advanced degree at the same school, the investment will serve your family longer and is more likely to pay off in greater appreciated value when it comes time to sell. Even if your student is likely to only stay in the home for four years, in a market like Atlanta where many intown communities are experiencing rapid appreciation, you may still find that your property has gone up in value when you are ready to sell.
5. Income to Offset Expenses
For most college students, shared housing is a key part of this coming-of-age experience. Renting out spare rooms can help offset your mortgage and/or associated expenses of home ownership like condo association fees, repairs, taxes, and insurance. Continuing to rent to other parents on behalf of their students after your student has graduated can also prove lucrative and help you wait for the home to adequately appreciate before selling.
6. Real-Life Experience
Purchasing a home and teaching your student how to properly maintain the property and pay bills associated with home ownership is a valuable life lesson that will serve them well when they purchase their own home. If you rent additional rooms to other students, you can also use this as an opportunity to teach your student about contracts and lease agreements.
7. Establishing Credit Worthiness
There are many mortgage products including the FHA “Kiddie Condo” loan available that helps students qualify for a mortgage by co-borrowing with a parent. This helps your student establish credit worthiness that will serve them later in life
8. Tax Savings
Unlike paying for on-campus housing or renting off-campus, you may be able to deduct mortgage interest and, if you receive income from renting to other students, some other expenses as business deductions.
9. Graduate Debt-Free
Student debt is at an all-time high and many young adults begin their careers crippled by the weight of student loan repayments. With the right planning, your investment in student housing could help your student graduate debt-free. The median student loan debt for 2017 graduates is over $28,000. Using earned rental income, you can pay down the principle on the loan increasing your equity; couple that with potential appreciation and you could find yourself with a sizable payout when you sell. Allocate those gains to paying off student loan debt and you are setting your student up for success as they launch their careers without the burden of debt repayment.
As you can see, there are many benefits to exploring purchasing off-campus housing for your student. Team Sterling offers expert real estate advice for parents looking to make a smart decision regarding their child’s student housing needs. Schedule a student housing advisement consultation today.