<p>My daughter just got accepted into Penn. I'm contemplating buying a property close to UPenn she can use during her 4 years there. I was thinking on buying something with at least an extra bedroom so we can rent it out and hopefully buying it right so that we can make some profit after we decide to sell it.</p>
<p>Some questions for existing families doing this:
1. What area is the best or preferred?
2. Financially, is this worth the investment?
3. Can any great deals be found?
4. Is this a crazy idea?</p>
<p>We're not from the area however, we own several properties out of state so this type of ownership doesn't concern me.</p>
<p>This isn’t an unknown course of action – I’ve heard of it several times at colleges I’ve been affiliated with. I’d try to see if anyone can direct you to a reputable realtor.</p>
<p>I live in University City but rent (and have for 40 years).</p>
<p>I also have heard of this. Parents or graduate students buy with comfort, because there’s an ongoing need for housing in the neighborhood. Instead of paying rent, you’ll be building equity, so that makes it good. Because the area has been gentrifying, don’t expect any great deals. People who come from New York and rent here think everything is a great deal, though!</p>
<p>Is your daughter going to be a freshman or a grad student? If the former, she may prefer a dorm instead of an apartment or condo. Make sure she’s ready to live on her own.</p>
<p>You can read a blog called Philadelphia Speaks or a website sponsored by the University City District, a neighborhood improvement district supported by local businesses and institutions. To find out about the resources available in the area, look at Close at Hand, the neighborhood directory that came out earlier this year. Full disclosure: I compiled the listings and sold the ads.</p>
<p>There are some excellent realtors in the area. See page 67. Elizabeth Campion grew up in the neighborhood and has raised a family here. The O’Donnells are second generation neighborhood residents. Ditto for Urban & Bye. Others are active and skilled, too. Look at a few websites and see which you prefer.</p>
<p>I love the neighborhood and can talk about it all day. If you have other questions, feel free to ask. And congratulate your daughter. She’s headed for a wonderful adventure.</p>
<p>I would STRONGLY encourage any incoming Penn freshman to live on campus. The overwhelming majority of Penn freshmen (upwards of 99%, if I’m not mistaken) DO live on campus, and it’s a socialization and bonding experience that shouldn’t be missed. It’s a big part of what it means to be a Penn freshman, and there will be plenty of opportunity in her subsequent years to live off-campus.</p>
<p>Wordworker;
Thank you very much for the additional information you referenced. I will look into these sites and begin to get educated on the areas and the “pulse” of the area.</p>
<p>We are still in “Cloud 9” over the acceptance and she is really looking forward to attending Penn. We couldn’t be more proud of her.</p>
<p>45 Percenter;
My daughter will be an incoming freshman and I TOTALLY agree with you about living on campus the first year. If I decide, I would buy something during her freshman year and she would move into it her sophmore year.</p>
<p>If you got, say, a three bedroom house and rented out the other two, you may be stuck renting it to people she doesn’t know or like. If two of her friends were to room there with her, cool. But on the other hand, if she wanted to room with three of her friends, they couldn’t all just go find a 4BR somewhere, since she’d be tied to the house. I don’t know if it’s my place to say anything about this, but that’s just my two cents, speaking as a current student! I’d love having a place that is definitively MINE, but I feel like I’d want at least a little flexibility in my options.</p>
<p>I also would be careful. She may end up in a residential living program that she loves and wants to stay in for all four years. She also is more likely to identify with the Penn community than the University City community.</p>
<p>Good news is that the big season for sales is spring and summer, because we have so many residents living and operating on school calendars. So you have time to explore and decide.</p>
<p>I understand most homes have 3 bedrooms and it’s best to rent out two of them. I agree she’d hopefully find a couple of her friends to rent with during her freshman year to want to live with. She needs to live in the dorms during her first year. You as a student, do you favor living in the dorms and enjoy dorm life or would you prefer being away from the mainstream? When I was in college I hated dorm life especially not having any privacy including they were always too noisy.</p>
<p>Wordworker;</p>
<p>It would only be for 3 years she would occupy this property. Before I do anything as an investor if I can’t make it financially worth it I won’t do it. We 're not getting any financial assistance from Penn and if I can make some money after owning it for four years that will hopefully, offset some of the overall 4 year costs of attending Penn.</p>
<p>I enjoy dorm life, but I know that next year I’m moving into a house with other people. The options aren’t either just to live in the dorms or buy a house outright though. I WILL be away from the mainstream (41st and Baltimore), but I’ll be renting with friends. If the people I’m rooming with don’t end up being my favorite people after a year, I’d want the flexibility to not have to stay in that house, you know what I mean? If your daughter wanted to room with THREE friends instead of TWO, for example, she couldn’t because she’s tied to the house.</p>
<p>jreeder;
It sounds like you enjoy dorm life and why would you want to leave it? If its financial, is it really worth it after all, being happy is more important than money. </p>
<p>Do you hear of people wanting to live off campus? Is it preferred?</p>
<p>I enjoy dorm life, but I’ll enjoy having my own kitchen more. I’ll enjoy living with people that I’m choosing to live with. Also, I can’t afford to live in the dorms any longer. I know that happiness is more important than money, but I’ll be as happy or happier off-campus (and my mother and I simply don’t HAVE the money to pay for a dorm). Renting is cheap if you go in with a couple friends ($800/mo and below), and I’m renting a big house with 11 friends–$450/mo. Totally worth it.</p>
<p>HUNDREDS (thousands?) of people live just outside of campus. The blocks between Baltimore and Chestnut and between 40th and 44th are almost ENTIRELY college students, many of whom are from Penn. And the vast majority of them are renting because they can’t afford to buy a house outright or they don’t want to have to worry about maintaining a house. If your daughter can honestly say, after her freshman year, that she wants to be tied to one house for the next three years and that she’s fine with only being able to have two other people live there–despite the fact that some of her friends will be rooming together in 5-6 person apartments and houses without her–then I say go for it. </p>
<p>My main point is that if people choose to live off campus, which MANY do, they usually rent. They don’t have to worry about maintaining the house and they’re not restricted in their choices for the following year.</p>
<p>Unfortunately, no one can predict real estate values in four years. </p>
<p>Prices have climbed steeply in the last ten years, especially on blocks in the catchment area for a new Penn-assisted elementary school. I don’t think that can continue, especially because the school now has begun to turn away eligible students for lack of room. Parents line up and camp out overnight in freezing weather to try to get their children in. If the school district can’t find an acceptable alternative, we may see an exodus across City Line Avenue (to excellent suburban public districts) and plunging house prices. </p>
<p>For condos, apartments, and houses outside the catchment area, who knows? It’s still a very desirable urban area convenient to downtown, transit, local institutions, and many amenities.</p>
<p>If you buy now, I don’t think you’ll lose money. How much, if any, you can make is unanswerable.</p>
<p>This is a very common thing to do. People do it most often in the westernmost part of Center City, across the Schuylkill River from Penn and Drexel, in the neighborhoods between Rittenhouse Square (very fancy) and the river. There are a bunch of condo buildings that basically cater to Penn and Drexel students, graduate and undergraduate, and 20-somethings working at the universities. They are easy walking/biking distance to the universities, and also to everything in Center City. There has been a boom in the condo market in the past few years, but I think you can still find functional, fairly nice 2- and 3-bedroom condos in older buildings at prices where the economics work.</p>
<p>University City west and southwest of Penn has a lot more character, but the properties are older – houses from the 1890s, or pre-war apartments – and more risky in terms of value fluctuations and things going wrong. </p>
<p>Don’t get me wrong – that’s where I lived, and I never wished I was living in a condo in Center City. But I’m not certain I would want to be an absentee property owner there, even if my kid were living in the property.</p>
<p>One trick to look out for in the University City neighborhood: properties that are inside the local preference zone for the Penn-Alexander Elementary School cost a lot more than equivalent properties in the same neighborhood, but on the other side of the street. Of course, if you are housing or renting to students, they probably don’t care what school their non-existent kids could attend, and they may not want to pay for the school. On the other hand, values are likely to be more stable inside the Penn-Alexander zone.</p>
<p>By the way, pretty much 100% of Penn students move off campus by their junior year, so it doesn’t make a lot of sense to hold open the possibility that someone will stay on campus.</p>
<p>I would add Melani Lamond to the list of brokers to contact about University City properties. Allan Domb is a big name in Center City condos, although he works more at the high end of the market.</p>
It’s not really 100%, or even close to that, but certainly the majority of Penn juniors and seniors do live off campus. 63% of all Penn undergrads live in college housing, meaning more than 6,000:</p>
<p>And a significant number of sophomores live off campus. Even if all sophomores DID live on campus, that would still leave well over 1,000 juniors and seniors living on campus. And given that a fairly significant number of sophomores live off campus, the number of juniors and seniors living on campus is probably at least 1,500 or so, if not more. So while more juniors and seniors live off campus than on, it’s not uncommon for students in those classes to live on campus (e.g., in the high rises, as RAs in the other dorms, etc.).</p>
<p>Melani is a good addition to your list. She’s very active and involved in the community. And Domb is the go-to company for luxury condos in center city.</p>
<p>As I mentioned, Penn Alexander is now turning away eligible students who live in its catchment area, because too many do. This past year was the first time, so we don’t know how it will affect housing prices if it continues.</p>
<p>I’m not a fan of the plan before one of my kids are on campus. They may</p>
<ul>
<li>want to stay on campus all 4 years</li>
<li>join a frat or soriority</li>
<li>study abroad</li>
<li>drop out</li>
<li>take a year off</li>
<li>etc, etc</li>
</ul>
<p>Nevermind being an absentee landlord. For me the bottom line is I would not want to alter my children’s undergrad experience because I wanted to pursue this plan.</p>