Is it smarter to buy or rent property for your college student?

College is expensive, but is there a way to make a long-term investment from room and board?

According to The Scholarship System, the average college student during the 2017-2018 school year spent $10,800 on room and board at public four-year institutions. At private nonprofit four-year colleges and universities, the average cost goes up to $12,210.

Some people wonder what the room and board actually includes. The “room” describes the living arrangement; however, this does not mean they get their own luxe, private space. This also does not account for the bedding, organizational tools, books, computer, vacuum, fan or other necessities. Shared dorm rooms that resemble a small jail cell are still part of the room and board equation. The “board” refers to the meal plan you’ll get constant complaint calls about. Then your child will beg you to put even more money in their account, so they don’t have to eat the inedible, sodium-filled cafeteria delight of the night.

While many colleges still require students to live on-campus for their freshman and sophomore years, they still have to find a place for the remaining 2 years and that dreaded 5th lap. So, instead of throwing your money down a never-ending garbage disposal… what if you could actually invest and make a profit?

College towns hold prime real estate because every year thousands of new, eager students and parents are looking for a place to move into.

While purchasing real estate is a long-term investment that typically takes about seven years for the investment to increase in value enough to exceed costs associated with buying and selling the property, you will eventually get your money back or make a profit.

That $12,000 you invest into your child’s on-campus living or college apartment could be invested in homeownership. When owning that college home/condo, income from roommates and/or tenants after graduation can meet or even exceed the home’s mortgage and related maintenance costs.

In addition to the financial benefits of owning this second property, you can also look forward to:

  • Stability For Your Student: Your young college adult won’t need to look for a different living arrangement each year. You get to pick the location that you feel will help your student succeed during these important times.  
  • Life Lessons: By owning real estate, you’ll be providing him/her with an excellent educational experience. Your child will not only learn about investing in real estate, but will also learn the responsibilities that go along with property ownership.  
  • Storage Space: Owning a property also gets rid of the hassle of storage during the summer months. If they are coming home for vacation, they can simply bring the necessities.  
  • Incoming Siblings: Do you have another child carrying on the legacy? Great! Now that child and their friends will have a place to live as well!


Roommate Lease or Rental Agreement

Even though the potential roommates are typically close friends, have each roommate sign a written rental agreement. Consult with an attorney for specific format and wording. The agreement should cover all the items found in a residential lease such as:

  • Term
  • Rental Rate and Due Date
  • Security Deposit
  • Notice to Vacate
  • Utility Payment Agreement
  • Maximum Occupancy
  • Parking
  • Pets

Is it Better to Purchase a House or a Condo/Townhome?

It depends on whether or not you think your student will be able to handle homeownership responsibilities like exterior maintenance, snow removal, lawn care, etc.
Often a condo suits the student life better since most college students won’t be interested in mowing the lawn in their free time. You'll have to pay a homeowners association (HOA) fee for a condo or townhome, which covers these maintenance items. This increases your cost but ensures that maintenance is taken care of. Read more about HOAs.



  • No lawn care, snow shoveling or exterior maintenance
  • Easier to just leave for the summer


  • Owner occupancy ratio of the complex could affect ability to purchase, sell or refinance
  • Homeowners association fee may be high and out of your control
  • Loud stereos might bother nearby neighbors



  • No concern over occupancy ratios
  • A single family home might be easier to resell than a condo since you tend to have more competing properties when selling a condo or townhome
  • No homeowners association fee (unless you buy a house in a planned unit development)


  • Student needs to mow and water the lawn and shovel snow
  • Neighborhood may be less friendly to a group of students living there

You are already paying for an expensive education, so the idea of buying a property might sound insane, but we are telling you… IT’S WORTH IT! Every payment brings you closer to owning the home. “When you pay your rent, that money is spent. Gone. Bye. Not returning. But when you pay your mortgage, you work toward full ownership.” – Dave Ramsey

In addition to owning the home, you’ll also get tax advantages. Many costs of owning a home (property taxes) are tax deductible. While you’re paying off that mortgage, you’ll also get to count your mortgage interest as a deduction when filing your tax return.


  • More than 67% of people’s wealth is from home ownership.
  • In 2015, the average net worth of a homeowner was $195,400, compared to just $5,400 for a renter, according to the Federal Reserve.
  • For decades, home prices have appreciated annually at average rates from 3% to 5%, according to The Huffington Post
  • A typical homeowner will be ahead of a typical renter by a multiple of 45 on a lifetime financial achievement scale, according to the Federal Reserve.
  • Homeownership is a key driver of wealth and forced savings. Paying off the balance of mortgage month by month is a forced savings mechanism that builds equity at the same time. And when the mortgage is up, you have something to show for it: ownership of a house that you can sell.” – The Huffington Post

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