<p>D wants to get her own apartment for her junior year. Her boyfriend is being put out on his own when his mom moves to Georgia. He currently has a busboy job where his mother works. He has decided his employment chances are better where D goes to school (MN) since there are no jobs here (FL) and even if you have one, you need a car to get anyplace. So he is moving in with her, and we are weighing the pros and cons of buying a condo versus paying rent. BF has money saved so that he can pay his share until he finds a job. Soooo... we can't decide whether it would be worth it to buy a condo or not. Mortgage payments plus association fee, taxes and insurance will be about equal to what rent would be. So far we found a nice one, foreclosure, but sold already. 40K for a 2 bedroom, 2 bath. Non-foreclosures are around $63K for one bedroom. There was a discussion about her current college roommate moving in with them, but they decided that might prove uncomfortable and someone's feelings might get hurt with D having to divide her attention. I know in my house that DH gets bent out of shape of someone else is getting more of my attention than him! Any thoughts on the subject? I am vacillating between renting and buying. I could use another viewpoint.</p>
<p>Will you want to be a landlord to strangers when DD graduates and relocates?</p>
<p>Some questions to think about:</p>
<p>How long will your d live in this town? Will she remain after she graduates to work or do grad school? What will happen if you buy the condo with the intentions of her moving out in a couple of years? Will you rent it out? Try to sell it? Can you afford it if it doesn’t sell?</p>
<p>If she is only planning on staying until she graduates with her BA and you can’t afford to pay for an empty condo (in case it doesn’t sell) I’d recommend renting. If she will stay for several years or you can afford to pay for it to sit empty, then buying may be the way to go.</p>
<p>Unless you can afford to cover the expenses of the condo after your daughter graduates assuming worst case scenario (no renters, no buyers) I wouldn’t do it. OTOH, I had a friend in grad school whose parents bought her an inexpensive condo in the 1980’s in Manhattan. The area went way upscale and the apartment is worth many, many times it’s original purchase price and my friend (and her partner) are still living there.</p>
<p>Unless the condo is in an area that is already built up and there is no more developable land, it is probably a bad investment. As the building ages it will lose appeal and value, and you will have, as someone else pointed out, all the disadvantages of being an absentee landlord. You will have to pay someone to manage the property when your D is no longer there. Also, buying and selling eats up profits in transaction costs and fees; unless you have a burning desire to live in the area yourself someday, I wouldn’t buy. Buying is for people who are planning on staying put for a while.</p>
<p>We have lots of parents from OOS that do just what you are suggesting in my college town. But…</p>
<ul>
<li><p>The condo needs to be in an area where the demand for rentals is high. In a college town, anywhere near the university tends to be great. Those that buy condos further from the university struggle to find renters once the kids graduate. How close is the condo to the university? Do lots of students rent in the area?</p></li>
<li><p>Probably need to hire a mgt company to handle leases and repairs if absentee owner.</p></li>
</ul>
<p>It looks like our son will be moving for work soon and I couldn’t imagine buying a condo as he may just work there for a year or two and then find a job somewhere else. My own early working years were full of change and it wouldn’t have been a good idea to buy real estate in those early years. We bought a place after we settled down.</p>
<p>Would you buy the condo if your daughter wasn’t in the picture? Would it make economic sense? If not, then it’s probably not a good idea.</p>
<p>A boyfriend could complicate things too if the assumption is that their combined incomes would pay the mortgage.</p>
<p>Rent. We considered (briefly!) doing this instead of D renting apartment for S/J/S yrs. Decided against for similar reasons to what other responders have stated - while the cost of ownership is offset by savings in rent while D is in school; our D is unlikely to remain in the community, we would then have to engage a local property manager or hope the market has improved sufficiently to allow quickly selling the property. Too risky. It would make sense to us if the purchase would be in an area where we’d want to own a property anyway.</p>
<p>FWIW, S is at a school where the college develops condo properties and markets them to parents of freshmen as a housing alternative and investment - gets some parents to help fund expansion of student housing, on-campus housing is tight, no guarantees after freshman year.</p>
<p>Both my kids moved off campus after freshman year. Both moved to rentals. We would never have considered buying a condo. A friend bought a condo for their oldest college D to live in w/ the plan that the younger D would move in too since she wanted to attend the same college. Alas, the younger D was not accepted to the univ. so the parents were stuck w/ the condo. It eventually sold but took awhile.</p>
<p>What happens if she and the boyfriend break up? Would you be placing her in a position where she urgently needs to find a roommate to help cover costs, rather than having the option of moving to a smaller place on her own?</p>
<p>Rent. Less hassle and stress.</p>
<p>1) Why would you want the liability? If someone slips and falls on an icy step, you (and the rest of the condo owners) are on the hook. Yeah, you can get insurance, but it is a big hassle. I speak from personal experience on this one.</p>
<p>2) Is your D going to manage it for you? Handle repairs? Take responsibility for collecting rent from her BF, even when he claims to be broke this month because he can’t find a job? (As an aside - “He currently has a busboy job where his mother works.” - this is very worrisome. Why can’t he a least be a waiter? Did his mother get him the job? What’s going to happen when he is thousands of miles from his mother and all his friends? Will he wind up sitting on the couch all day playing CoD while your D does all the work?)</p>
<p>3) The transaction costs will eat up any potential savings, particularly if it takes several months to sell after she graduates.</p>
<p>If there is no substantial saving over renting, I can’t see an up-side.</p>
<p>Unless you’re willing to hang onto it for at least 5 years before selling it, it’s in an area where it would easily rent out, you have enough resources to cover it not being rented for some periods of time between tenants, have a decent property management company to take care of it, etc., and are willing to subsidize your D’ BF living there free (which will likely happen), then you’re better off renting (but still need to contend with the BF issue). </p>
<p>btw - It’s possible there might actually be a job or two available in Fla. - this is most likely about the BF wanting to live with the D - not about lack of getting a job - but that’s a whole other issue - just don’t let the wool be pulled over your eyes on this one.</p>
<p>Rent.
I know three or four people who have done this. The only one who didn’t regret it was a family who bought the condo when the oldest was a sophomore at state flagship that all of their kids attended. Brand new building at the edge of a campus with too little dorm space. They had a child there (or two during the daughters overlap years) for ten years, then sold at a profit.<br>
You situation is short term and then you add the uncertainty of a romantic relationship into the mix…</p>
<p>Thanks for all the viewpoints, I really appreciate it. I think we are going to skip the condo purchase and go with the rent. Makes more sense.</p>
<p>@ Glad & Notrich: The BF currently lives at home with his mom and 2 younger siblings. They live very close to the bone with very little money to spare. She works as a waitress at a pizza restaurant, and yes, he got the job thru her - they drive together. In fact the BF lent his mom money one month so she could cover the rent until she got her overdue child support check. There is no extra money to buy him a car or even pay for the insurance for him to drive hers. Amazingly enough, not every kid (including my D) has a car. Yes, there is a job or 2 in Florida, but unless you have a car, you can’t get to them. There is no public transportation where we live. He’s a hard-working kid from a hard-working family, and he’s not going to live with D for a free ride. His mom and siblings are moving to Georgia and told him he would be basically on his own, there was no room for him. He’s in a catch-22 where you can’t buy a car unless you have a job and you can’t get a job unless you have a car. </p>
<p>Local rentals are equal to what we are paying now for housing, so even if he was unemployed for awhile, it would still be a wash.</p>
<p>Rent.
Bad idea to have the BF to move in with your daughter, even if he is paying for his share. I would encourage him to get a job some where. If I really liked the BF, I wouldn’t even be opposed in helping him out with rent and etc just to get him started. BUT there would be no way that I would let him move in with my daughter while she is still in school and I am supporting her. Your D is still in college. She should be focusing on her school work, her friends at school, and not have to deal with a BF living with her without a job. What would you do if the BF runs out of money? Would you be prepared to pick up his share of the rent, food, insurance…?</p>
<p>We purchased our daugther a 5 bedroom house in Denver 1/2 mile from her university. She rents out 4 of the bedrooms to friends which pays for the entire mortgage payment plus a slush fund for repairs. I have to add that she is very responsible, and has fixed toilets, plumbing issues with help from dad over the phone. Since the house is so close to school, she has a line of friends wanting to rent. She allows no parties of any kind, so they must all tow the line to live there. It is saving each girl about $400 per month not to live in the dorms, plus they all have their own rooms.</p>
<p>
In my state it is actually illegal for more than three unrelated people to live in the same dwelling unit, unless it is zoned as a rooming house. Every once in a while (usually when students have done something to aggravate the local authorities) they go around and check mailboxes or whatever, and if you get busted you can be forced to move.</p>
<p>Both our kids went to the same U but we were never tempted or in a position to buy them a place. It worked out just fine. They both had university connected housing for two years & then lived in apartments. There is a lot of wear & tear in apartments, especially when rented to students. </p>
<p>I know you’re not asking us about whether the BF should live with your D, but if it were my kiddo, I’d strongly discourage it. Having a live-in BF is distracting from schoolwork, IMHO. There will be time enough for that later. If BF wants to move to MN, he can find his own place to live–a room in a house or his own rental somewhere. College is a time to discover who YOU are before you figure out who you are as a couple with someone else.</p>
<p>I would not consider buying a place for a college student but I did want to let you know what some good friends did. Their son is in a public college in a neighboring state. After freshman year, they bought a house near campus. He lives there and maintains it (great experience!) and rents the other three bedrooms to friends. They’re saving their “share” of the mortgage payment and each summer will improve the house with it. After a year their son has in-state residency, another significant cost savings. They’re not paying any more than they would if he were living on-campus, plus they will <hopefully> make something on the house after he graduates (I don’t think they have any intention to keep it as a rental property, but who knows?).</hopefully></p>