<p>I own several rental properties, unfortunately not where the daughter is looking for college choices. Any parents out there that have bought investment property specifically due to their child attending a college in a certain location? Benefits or detriments to doing this?</p>
<p>Elliot</p>
<p>We’ve tossed around the idea. If our kids end up living off campus, we may consider doing that, especially if it looks like they will stay in that area for a while, like DD attending medical school after UG. Drawbacks would be college kids living in your rental :D. We also have rental property so many of the concerns would be the same, getting rent on time, fixing broken things (long distance possibly), etc. We have found a wonderful handyman that is very reasonable so that helps but schools the kids are considering are too far away for him.</p>
<p>I would imagine she will have to live in a dorm for at least freshman year, that is pretty standard. So you would be doing this for 3 years of housing.</p>
<p>What are you going to do with it after your D graduates? The transaction costs alone to sell it may be 1 or 2 years’ worth of off-campus housing costs, or even dorm costs, especially if she has a roommate.</p>
<p>Who is going to manage it? I assume it will be long distance.</p>
<p>Unless you charge your D full market value for rent (and declare the income) you will have to treat it as a second home… you’ll lose a lot of the tax advantages. Could mess up your FA too, if you will be getting any need-based aid.</p>
<p>You are gambling you will be able to get your money back out in three years. If the housing market is at the bottom you could score some nice capital gains, or you could be stuck with it or have to sell for a loss.</p>
<p>It seems like a lot of risk and work for the payoff.</p>
<p>We briefly entertained the idea… but our kid wanted to continue to live in a dorm, he didn’t want to move off-campus.</p>
<p>Having one’s own kitchen could be a detriment if the student doesn’t want to use his time that way. Grocery shopping, cooking, washing their own dishes, dealing with the garbage…some would rather just wait for all that fun to begin. Even a student who can cook up a great meal at home faces a lot of new challenges trying to run an entire kitchen. </p>
<p>Increased walking distance to campus, or time for short commutes/parking, might bother some students.</p>
<p>These are social, not fiscal observations. Even if the math works out on paper, it’s important to consider what impact this would have on the student’s college experience, in terms of time for academics and being centrally located to all friends on campus.</p>
<p>S had one friend whose Dad was so well-situated he bought his freshman a college-town property where S lived alone and like a king in a two-floor unit that looked like a corporate executive residence. The other unit in the building was rented out, I’m not sure to whom (the kid’s servants, maybe). In that case, the social difference was so obvious it made other students cautious to befriend the student, at first. But that was pretty extreme.</p>
<p>Both my S’s live(d) in off campus rental houses with three other guys. I can’t begin to say how awful those places looked. College kids will not take care of a house the way you would like them too. From what I’ve seen, girls can be almost as slovenly as boys.<br>
Do you think your D would want to take on the responsibility of being the “house police”?
It might put her in a tough situation w/ her roommates. </p>
<p>Being a long distance landlord could be a pain. For instance one night last winter (after midnight) the pipes burst in S2’s upstairs bathroom. Water was pouring through the ceiling into the kitchen. S2 immediately called the landlord who called a local plumber. Both showed up at S2’s house in less than 30 minutes and handled the situation. It would have been much more difficult for all involved if the landlord had not been local. </p>
<p>In both my S’s college towns, location is everything. They all want a house within walking distance of the college because commuter parking or catching the university bus is a real pain. Student/ their parents will pay premium rent to be close to campus.
So just any nice rental house will not be attractive to student renters. From my observations (in their student filled neighborhoods), the house can look like a hovel and it doesn’t matter if they can walk to class in ten to fifteen minutes. </p>
<p>Then there’s the problem of selling it after your D finishes school.</p>