A New Home for a New Year

Posted on: 13 January 2017

If your child is headed off to college in another city or state, you're likely facing the dilemma of how to house and feed them without going broke. Room and board can be one of the biggest college-related expenses, so it's vital that you figure out how to fit it into the family budget. One method that's increasingly common in the era of big housing bills is to buy a house or condo for your kid to live in. It may sound a little extreme, but it can be a budget saver. Here are 4 ways to know that this might be the right choice for you.

Your Child is Responsible. Since you don't live in the immediate area, your child will need to be the primary caretaker of the house, so be sure they can handle the responsibility. He or she will need to do things like perform regular maintenance, notify you of problems, prevent damage, and possibly do seasonal tasks. If you plan to rent to additional roommates, be sure that your student can assist with landlord obligations as well. If you don't think that they will be a good tenant, you may want to just rent a place for now. 

You Want to Keep the Rental. When your child (or children) are done with their time at the university, you'll need to decide what to do with the house. Talk with students to see how the area is for things like transportation, ease of getting to classes, and places to eat. If you find a house for sale in the right spot, you may want to consider keeping the place as a rental. While becoming a landlord may involve some additional effort, you may find it's well worth it to have a regular pool of renters year after year. 

You're Expecting Four Years... At Least. Buying a home -- even temporarily -- is a big investment, and you may lose money if you have to sell it again quickly. So, be sure that your child is serious about the school and sticking it out for the degree. If you have multiple kids approaching college, it's an even better investment if you're reasonably sure that more than one child will use the house for their college years. 

You Can Meet the Costs. Owning a home can come with a number of regular and irregular expenses. Regular costs, like the mortgage, insurance, taxes, and utilities, may be relatively easy to anticipate and work into your monthly budget. Irregular costs -- repairs, maintenance, upgrades, and emergencies -- can be harder to plan for. Be sure that you can comfortably meet the regular housing costs without any additional rental revenue or skipping out on your own expenses. And it's a good idea to set aside at least 3 months' worth of expenses in a dedicated fund for the college house. 

Objectively assessing the options of buying a home for sale near your child's college may just help you find a great solution to the problem of paying for a place to live. And then, you'll have one less thing to worry about as your baby heads off to school.