Student Loan Dodgers

For some families with college –bound students, the question of room-and-board is converted to the question of whether it’s better to rent or buy. In certain college markets, renting a place to live close to campus is so expensive that buying a condo or home nearby makes more financial sense, even when real estate taxes, insurance, maintenance, upkeep and utilities are taken into account.

If you think your college town might fall into this category, do a little research to compare average rental and mortgage prices for properties in the area you wish to live in. Don’t forget to look at taxes and insurance. In some areas, property taxes are higher on rental properties. Another area of offset might be utilities. Apartments sometimes include utilities costs in the rent. The cost of transportation is also a factor, if the property isn’t close to campus.

You can offset the cost of the mortgage by renting extra rooms out to friends. This can be a tough call, since friends don’t always make the best roommates. You’ll also need to understand the real estate market in the area in which you’re buying. If real estate values are holding steady or even rising in the area, selling the property when you’re finished with it will be easier and will likely mean that you’ll recover some of your mortgage payments. On the other hand, if the market is down or stagnant, selling may not be possible, and you’ll be renting out the property from afar.

You won’t really know whether you’re coming out ahead in a rent-v-buy arrangement until after the fact, but owning an address in town could give you residential tuition rates if you’re attending an out-of-state public institution. Residential tuition rates can be substantially lower than out-of-state rates and the opportunity to take advantage of them shouldn’t be overlooked in the decision to rent-v-buy.

Another good argument for buying can be made by parents who have more than one child attending the same institution. It’s a convenient way to extend the family household and make a good investment at the same time.