How should I provide housing for my son when he’s going to a university later on.
Should I buy a house near the university? or should I let him rent an apartment or dorm near that university he’s going to attend?
People do it many ways. Maybe he’ll have some ideas on what he wants - continue to live in the dorm, fraternity house, apartment with friends, being the landlord of an apartment/condo you buy.
I would say few people buy homes for their students. Since your screen name is PharmacyStudent, I assume this is for graduate school. I would say that most graduate students rent apartments. Universities sometimes have apartments for rent. They may be better maintained than what one could rent on the open market but also more expensive. Are you from outside the U.S.? What city is your son studying in? He could maybe rent from the university the first year and then move the second to an off-campus apartment, maybe with friends.
You should probably separate the ‘investment strategy’ component of buying real estate from the ‘housing for my son’ component. Your son will make friends and potentially want to try lots of different housing options - dorm housing his first year perhaps, a group house the second year, a shared apartment on or off campus another year, a ‘mother-in-law’ suite in a faculty member’s home the year after that. It’s hard to say what will suit him best so if you do buy housing, be prepared for him to want to live elsewhere, and having to rent out the space.
If it is undergraduate I would say that he should start off in the dorms…it is easier to meet people and make friends. Then Junior/Senior year he could move to an apartment.
I agree that if he is an undergraduate I’d start in the dorms. You can make any other decisions once he is settled in the school, learns the area etc.
How old is your son now?
Will he be attending a four year residential college? If so, living in a dorm for at least a year or two would be a good plan. Some schools actually require freshmen to live in the dorms.
Do you really have the financial resources to buy a second house? We know some families who did this…and their kids lived in the houses, and they rented the additional bedrooms to friends. It was a good arrangement…but they had the extra money to do this. However, in every case we know, the families wanted to sell when their kids graduated, and were unable to do so…so they became landlords. Not their plan.
If you don’t have significant financial resources, you kiddo could very well attend a college that is within commuting distance of your family home.
Will you be applying for need based aid? If so, the equity in that second home, if purchased, will be viewed as an asset on your financial aid applications.
@thumper1 my son is 18 years old. Yes he will be attending a four year college. I’m sure I have enough financial resourceful for a second property.
But for financial aid with my second property will they give less money for my son?
That’s a good point. A second home is an additional financial asset, so if you’re drawing on any need based aid (probably not if you have enough money to buy an apartment) then that might be impacted. Non-need based aid should be fine though since they wouldn’t care about your income or assets.
I agree with the others who say that you shouldn’t buy the apartment unless you’re prepared for the possibility that your son might not want to live there. You can afford it, but it might be a waste of money if it turns out that quality affordable housing is plentiful or your son has other plans (dorms, etc.) It also might be a hassle since you’ll become a landlord or have to deal with a separate property management company.
@DmitriR I do think it’s cheaper if you going to buy a cheap property for my son than having him in a dorm with high expensive. But would it affect my son’s financial aid in a bad way? Because with the additional financial assets, he’ll be getting less right?
Yes, the condo/property will be considered a second home and the value will count against you. You are assuming he will get need based financial aid, but if you have assets to use to buy the home, those assets will also count against you.
My roommate’s father was going to buy a condo for her to live in after her freshman year in the dorms. He didn’t because she joined the sorority and then lived in the sorority house. My boss’s father did buy a house when she was in college because her 3 brothers also went to the same college. If they had extra rooms they rented them to friends, but often it was just them living there. She was the mother hen, so it worked out. She continued on to law school in the same town, so the house was a good investment at 6+ years of kids living there. For one kid? Maybe not such a good investment.
Please don’t try to buy someplace for your son. He ideally will live on campus his first year, even if within commuting distance. There is so much to learn after hours. His next three years could be on campus or in nearby apartments. Let him have the normal college experience of choosing his housing as he experiences his school. He may want to room with people who do not want the place you’ve chosen.
Time to back out of his life as much as possible. Being his landlord would not give him the freedom/independence to make choices. Also- who’s going to take care of the place? I wouldn’t expect my college son to have to take time and responsibility for maintenance chores that should be a landlord’s. Grass mowing, snow shoveling, repairs…
I agree with Wis. Save the condo purchase money for after your son gets his degree and his first job.
If you have the extra resources to buy a second home (which is what this condo would be…you would need to qualify for the loan…and your income would be the primary driver), what kinds of need based aid were you expecting anyway?
If you NEED money to pay for college costs…use your money to pay for college costs, not buying another home. And yes…the equity in that second home will likely reduce your need based aid…and if you rent a bedroom to another student, that rent will be income.
How much need based aid do you expect to receive with an income that can support buying a second home?
Looking at your original post again. Do not worry about needing to provide housing. Virtually all colleges have housing for incoming freshmen. Some even require freshmen to live on campus. Affordability of any school may include the whole package of tuition/fees, books/supplies and food/housing. Your son will weigh his options based on these factors. Your input is for how much the family can budget for these expenses. It is NOT finding him a place to live. Remember that it is your son’s life and HIS decisions, not yours to dictate.
I’d advise against buying a house in the college town. There is no need for it because colleges have dorms (at lest for freshman year, often longer) and college towns have plenty of rental units. If you buy a house, you set yourself up for all sorts of unpleasant family dynamics.
I know several families that bought houses for their college students and it has caused stress. In one case a sister and brother were at the same school but resented having to live together (and share a car…since the property was in an affordable but inconvenient location). In another case there was debate about getting renter for the other bedroom and also different cleanliness standards.
If you have enough savings to buy your son a house outright, then I am guessing it is highly unlikely he will receive need-based financial aid, since most houses cost more than a year of college tuition even at a private university.
Not a financial aid expert…If you could afford to buy a place for your son to live in, it would mean you have the money sitting some where. Why would it matter whether you are investing it in a property or have it sitting in a bank account, wouldn’t it be counted toward to your asset no matter what? Of course, unless you are not declaring the money on your FA application.
Your money is an asset whether you invest it in property, stock, mutual fund or cash in a bank.
Oldfort makes a good point. The equity in a second home is an asset. The equity in money in the bank is an asset. All you would be doing is changing the location of your asset.
Let your son live in the dorm if he attends a residential college…at least for the first year or two.
Most residential 4-year colleges require freshmen to live in dorms, and often sophomore year too. The reason is that research has shown these students are more successful academically, are more involved in campus life, and overall have a better educational experience, than students who “commute”. They have support and supervision, as well as ready access to all the resources they need.
Socially, it’d be very awkward for a freshman to live in his own apartment when all his friends are on campus, although he’d probably be popular on weekends due to having no supervision + own apartment = huge parties. Don’t expect to get your property back in good shape though (I’ve seen what even juniors can do to an off campus apartment and apparently freshmen have limitless energy and imagination when it comes to pranks and logic defying stunts - turning the bathroom into a whirlpool, icing the corridor, tray-sledding down the stairs, using the sink for an icebucket and attacking it with an icepick…).