Ditching the Dorm Room with Real Estate

college housingAs someone who is thinking about the daunting task of saving enough to put four kids through college, one thing that I find rather interesting is the cost of student housing. Recently, I took a look at the cost of University of Texas at Austin, my wife’s Alma Mater, and was surprised that the cost of housing was more than the cost of tuition. For a nine-month contract without the meal plan it’s about $15,000-or about $1,650 a month. Given that you’re sharing a room and using a community bathroom/laundry, that feels a bit pricey.

If your child is headed to a four-year institution or is considering a dual degree program (e.g., Bach/Master’s program, Master’s/PhD program), I think you will find it worth your time to assess the trade-offs of living in the dorm, renting a place off-campus or buying a place for your student to live during their studies.  Investing in real estate while interest rates are still low can be a great way to provide affordable housing for your student. Unlike a dorm room payment or rent, you actually have a chance to re-coup your housing costs if you invest smartly upfront.

There is no doubt some university areas are more expensive than others – such as New York and California – but generally speaking in the central part of the US, a shared dorm room will run between $8-15k a year at a public institution. In the rental market, students will spend around $500-1,250 a month depending upon the rental amenities and proximity/access to campus. There’s a big swing in pricing depending upon the university/local real estate market as well as the kind of environment you want your child in while they are at school.

While there might be some benefits to living in a dorm the first year, getting your student into the right long-term housing can help them achieve academically whether you decide to rent or own. Here are some housing cost estimates for some of our favorite schools and real estate within walking distance to campus.

University Housing Areas

  • University of Texas at Austin

Dorm Room: $15,000

Off Campus Rental per Student: $750

3/2 Condo walking distance to campus:  $240k

  • Ohio State University

Dorm Room: $8,000

Off Campus Rental per Student: $500

2/2 Condo walking distance to campus: $110k

4/1 Cottage walking distance to campus: $180k

  • University of Kansas

Dorm Room: $8-10k

Off Campus Rental per Student: $500

2/1 Condo walking distance to campus: $99k

4/2 Bungalow walking distance to campus: $140k

If you have been thinking about purchasing real estate near a university area, whether for your student or your own personal enjoyment, I would be happy to discuss your options with you as I can do loans in almost all 50 States. If you have been toying with buying property near your Alma Mater, or to help provide suitable housing for your student(s), there’s no time like the present.

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