Buy a condo for college?

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Heyolshan
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Buy a condo for college?

Post by Heyolshan »

Here's my situation. I have 2 boys, entering Senior and Junior year of high school. Both plan to attend the family university straight out of high school. Off campus rent is roughly $500/month per person.

During the housing boom, the area around the college overdeveloped, and now there's lots of bargains to be had. You can get into a nice 3BR/3BA between $95-120,000, depending on proximity to campus. HOA fees avg around $100/mo, and prop tax is $1000-1300/yr.

I am confident both of them will finish undergraduate there, which means we will have someone in school for 5-6 years. Would you buy or rent?
YttriumNitrate
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Re: Buy a condo for college?

Post by YttriumNitrate »

Do your boys want to live with each other in college? Also, do you plan to rent out the other room(s) to other college students?
Slapshot
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Re: Buy a condo for college?

Post by Slapshot »

Do it. My son tried to get us to do this 20 years ago when he went to Univ. of Colorado, Boulder. At the time we didn't have the money, but certainly could have gotten a loan. Look at how much you'll pay in room and board for 4 years for both of your kids. Then also figure that you'll have some control over their situation. Plus bringing in roommates will create more cash. I wish we had done it. How can you lose unless there is another huge real estate meltdown? By the way, our son is 38 and has over $1.5 million in properties, all positively cash flowing, while he works as a school psychologist.
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ddunca1944
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Re: Buy a condo for college?

Post by ddunca1944 »

If your sons are responsible, it can be a great idea. My sis and BIL did that when his son went to college. The kid got a roommate, charged rent and that was his spending money. When he graduated, they sold the condo at a profit.
island
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Re: Buy a condo for college?

Post by island »

YttriumNitrate wrote:Do your boys want to live with each other in college? Also, do you plan to rent out the other room(s) to other college students?
That's what I was wondering and are they ok with having their parents as landlords or want more independence? What do they think of that plan?
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Watty
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Re: Buy a condo for college?

Post by Watty »

Dorms have an advantage in that there is at least minimal supervision and they are a great way for them to acclimate to college and make new friends so there is a lot to be said for having them live in a dorm for at least their first year. If they live in a dorm on campus for the first year there is little need for them to have a car so even if they have a car there. they will be driving a lot less which could be a good thing for while they are adapting to being out on their own.

I know someone that did this for her two daughters and one of them changed majors and switched campuses after the first year so I don't think that you can count on them both being there for the full time. One of them might want to spend a semester abroad too.
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sdsailing
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Re: Buy a condo for college?

Post by sdsailing »

Sounds good but I would go with a SFR rather than a condo if the price works out. Condos can be restrictive and rules (regarding rentals, for example) can change over time. Also the HOA fees add up.
Calm Man
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Re: Buy a condo for college?

Post by Calm Man »

OP, assuming you went to college, you will be able to see where I am going easily. If not, take my word for it. A great part of college is the college experience. For most colleges if not commuter colleges that can include being on campus, that is, right there for all activities, lectures, talks, hanging out with kids in your dorm or suite or whatever. Living in a condo owned by your father removes those possibilities in my opinion. I'd just pay the room and board and be happy for your boys.
123
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Re: Buy a condo for college?

Post by 123 »

I wouldn't rush into anything. Your kids may prefer dorm life because it's more social and the cooking gets done for them at the dining hall. There's more peer pressure at the dorm to keep them in line (hopefully). Things can get kind of lax around private apartments.

Since they have not yet probably been accepted, or even applied, at any particular college the school that they really want may not be known to you. It's easier for kids to say "Of course, Dad, I want to go to the family school" when it doesn't matter yet. When springtime 2015 comes around and college acceptances and commitments have to be made there's some chance the choice might be different. And it may not be a good idea for them both to attend the same school, a little separation may be better for them to develop independence. While I can understand the desire to insure that they have economical acceptable housing, two kids in college is expensive, the potential arrangement has somewhat the flavor of a helicopter parent.

Not every part of life can be manipulated to produce a potential profit.
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joerh
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Re: Buy a condo for college?

Post by joerh »

Is this college already in the same state they are in now? I went to graduate school in another state (Fl to Tx), spent a semester finishing up pre-requisites, and bought a condo before the program started. I was able to get in-state tuition. My father co-signed on the lease, though he didn't put up any of the $ (risked his credit on me). Made buying a small condo a no-brainer. I rented out the other room to my classmate, which cut my monthly PITI + HOA down to $120/month, and then sold it 3.5 years later for a nice profit. It all worked out well for me, but that's only because the numbers worked in my favor. I would have been more than happy to rent if it wasn't.
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BolderBoy
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Re: Buy a condo for college?

Post by BolderBoy »

Slapshot wrote:Do it. My son tried to get us to do this 20 years ago when he went to Univ. of Colorado, Boulder.
+1
I live in Boulder and this is done all the time here. Few people lose money doing it, here and most sell the properties when the kids graduate.
Stonebr
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Re: Buy a condo for college?

Post by Stonebr »

123 wrote:I wouldn't rush into anything. Your kids may prefer dorm life because it's more social and the cooking gets done for them at the dining hall. There's more peer pressure at the dorm to keep them in line (hopefully). Things can get kind of lax around private apartments.

Not every part of life can be manipulated to produce a potential profit.
+1

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Doom&Gloom
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Re: Buy a condo for college?

Post by Doom&Gloom »

Calm Man wrote:OP, assuming you went to college, you will be able to see where I am going easily. If not, take my word for it. A great part of college is the college experience. For most colleges if not commuter colleges that can include being on campus, that is, right there for all activities, lectures, talks, hanging out with kids in your dorm or suite or whatever. Living in a condo owned by your father removes those possibilities in my opinion. I'd just pay the room and board and be happy for your boys.
I couldn't agree more. My step-daughter roomed, after her first year, with a couple of HS friends and another girl in a house that one of her HS friend's father bought for that purpose. It was right before the RE bust, so I'm certain that he took a bath. In addition, to this day I believe that my step-daughter missed out on a large part of the value of the "college experience" by being housed off-campus with a core group of friends that she knew prior to going to college.
Steady59
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Re: Buy a condo for college?

Post by Steady59 »

Yet another UC/Boulder parent. Put two sons through school there. One has even stayed on after graduation. Should have bought the condo instead of paying 6 years of rent. Do it!
KyleAAA
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Re: Buy a condo for college?

Post by KyleAAA »

As a student, dorm life is far preferable for the first year or two. After that, having a condo would be nice.

I would also NEVER have lived with my brother in college.
oragne lovre
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Re: Buy a condo for college?

Post by oragne lovre »

OP, I do not mean to hijack your thread.
Since I have children who are going to colleges in several years, it's also good for me to plan ahead. I just want to say thanks to all of you who provide honest recommendations.
The finest, albeit the most difficult, of all human achievements is being reasonable.
Topic Author
Heyolshan
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Re: Buy a condo for college?

Post by Heyolshan »

KyleAAA wrote:As a student, dorm life is far preferable for the first year or two.
This bears mentioning, since a few posters have said the same thing--at the college we are looking at, freshmen dorm rooms are 2 people in a 13x13 room, and they share a bathroom with 2 other people in an identical room. Condos almost all have their own bedroom/bathroom, are considerably cheaper, and I know my boys well enough to know they would want their privacy.

Those of you who are big on dorm life, did you have a similar situation (no privacy)?
investor1
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Re: Buy a condo for college?

Post by investor1 »

They may plan to go there, but they may also change their minds.

If you buy a house for college students, you need to be prepared for them being irresponsible. Expect damage to happen. I know kids that were very well behaved in HS and went to engineering schools that partied non-stop once they got away from their parents and flunked out of school.

Is the place close enough for you guys to drop in from time to time to keep them in check? If one or both kids don't end up going there, would you still think it was a good buy?
investor1
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Re: Buy a condo for college?

Post by investor1 »

Heyolshan wrote:
KyleAAA wrote:As a student, dorm life is far preferable for the first year or two.
This bears mentioning, since a few posters have said the same thing--at the college we are looking at, freshmen dorm rooms are 2 people in a 13x13 room, and they share a bathroom with 2 other people in an identical room. Condos almost all have their own bedroom/bathroom, are considerably cheaper, and I know my boys well enough to know they would want their privacy.

Those of you who are big on dorm life, did you have a similar situation (no privacy)?
Dorm life isn't about privacy. It is a social experience.
island
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Re: Buy a condo for college?

Post by island »

Heyolshan wrote:
KyleAAA wrote:As a student, dorm life is far preferable for the first year or two.
This bears mentioning, since a few posters have said the same thing--at the college we are looking at, freshmen dorm rooms are 2 people in a 13x13 room, and they share a bathroom with 2 other people in an identical room. Condos almost all have their own bedroom/bathroom, are considerably cheaper, and I know my boys well enough to know they would want their privacy.

Those of you who are big on dorm life, did you have a similar situation (no privacy)?
Share a bathroom with 3 other people? Oh dear, poor things. There are bigger families that share 1 bathroom!

I agree with the others that they will meet more people, form more friendships, and learn to be more independent and self sufficient if they lived in a dorm for a year or two. It's about the college experience. I've never heard any college kid complain about lack of privacy. Don't even plant that seed. However if your boys ever played any team sports I'm sure they're already familiar with no privacy. And what if they decide to pledge a fraternity? No privacy there.

When I went to college I lived my freshman year with someone I went to high school with. It definitely limited my social interactions and overall college experience, at least for that year. I moved to a dorm for the next 2 years where I didn't know anyone and they were the best of my undergraduate years. I still keep in touch with several friends I met in the dorms and that was over 30 years ago. It was also a great opportunity to learn how to deal with people.

As far as sharing a bathroom. Yes, and in my case, the entire floor shared a bathroom. About 20 girls shared 3 stalls, sinks and showers! I'm a pretty private modest person and it worked out. Millions of college kids deal with it and I'm sure yours will survive it too.

I too would not want to live with a sibling at college no matter how close. Might as well stay home and commute.

Best to cut the apron strings.
rj49
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Re: Buy a condo for college?

Post by rj49 »

Stuff happens, too. Maybe one won't want to go to the 'family university', and there's no guarantee that both will finish, especially not in the usual 4 years. Maybe they'll want to spend a junior year abroad also, or take time off before finishing, or transfer elsewhere. Then having a dorm meal plan would give them more time for studying and perhaps a better diet, and the best part of college for me was meeting people in dorms, which stopped after I moved out of them, to my lasting regret. Then of course nobody wants to room with a brother, especially when it comes time to deciding chores, cooking, etc. My sister had the same thought about buying a condo for her kids for college a decade away, but it was mainly just a way for her to satisfy her house-buying lust and dreams of real estate investment. Letting them do dorm life or an off-campus rental also makes it easier to give them a financial stake in the game as well, such as "I'll pay for dorm room and board but if you want off-campus housing you'll have to earn the difference".
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celia
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Re: Buy a condo for college?

Post by celia »

Not only is there some supervision in the dorms, but a full meal plan is usually required for freshmen. This encourages students to get out of their rooms and meet others during meals. The meals will most likely be healthier than what they prepare for themselves. Many dorms have maid service these days, along with internet access that tells which washers and dryers in the laundry room are done/empty. It is a lot more conducive for studying (especially during finals) when every one else is doing it too.

How much easier can it be for new students to meet and get to know others than by living with them?
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TomatoTomahto
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Re: Buy a condo for college?

Post by TomatoTomahto »

Don't conflate your kids' college experience and your investing.

High among what my son looks forward to for the next four years is the dorm experience. Classes are only so many hours, and hanging out talking into the wee hours is part of college. And, there is NO way he'd be cooking as well as the school dining hall.
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Smurf
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Re: Buy a condo for college?

Post by Smurf »

I agree they should at least live in the dorm during their Freshman year. They will meet 90% of their new college friends living in the dorm. It will be hard to make new friends (potentially life long friends) living in a condo off campus as they will just be separate from everyone else. Plus......the girls! :D
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TxAg
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Re: Buy a condo for college?

Post by TxAg »

Wow, I'm surprised at all the positive comments in dorms. If your kids are friendly and outgoing, they will make friends. I would encourage them to join different groups, etc.

If the numbers make sense, then go for it. Living on campus is blah compared to having your own place. Off campus (as long as it's within 10 miles or so) is far preferable. My brother and I get along well, so it was a no-brainer for our family.
BigJohn
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Re: Buy a condo for college?

Post by BigJohn »

I looked into this option about 8 years back in similar circumstances but with three kids. Lots of people in town pushing and pursuing this option. Once I factored in all the costs (ie insurance, property tax, etc) it was just about a wash with renting. Ultimately concluded that financially is was purely real estate speculation, a win only if prices went up substantially when you sold. On the soft side, it also likely put me in the landlord business with roommates who might be family friends which can be difficult. Then, if you can't sell, you're in the landlord business full time and possible paying a rental management company. Nothing about this felt right to me so I went against the current and just choose to rent.

This was in 2006/07 and by the time the dust settle on housing prices in 2008/09 it was clearly one of the best financial decision I've ever made. :D
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island
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Re: Buy a condo for college?

Post by island »

TxAg wrote:Wow, I'm surprised at all the positive comments in dorms. If your kids are friendly and outgoing, they will make friends. I would encourage them to join different groups, etc.

If the numbers make sense, then go for it. Living on campus is blah compared to having your own place. Off campus (as long as it's within 10 miles or so) is far preferable. My brother and I get along well, so it was a no-brainer for our family.
So I take it you lived with your brother off campus? Ever live in the dorms or with other people?

If you live in a college town, 10 miles away if far removed from campus life.

OP curious, where are they going to school and why do you call it the family university; you, spouse and all siblings alum? Is it in the same town you live in?
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Re: Buy a condo for college?

Post by KyleAAA »

Heyolshan wrote:
KyleAAA wrote:As a student, dorm life is far preferable for the first year or two.
This bears mentioning, since a few posters have said the same thing--at the college we are looking at, freshmen dorm rooms are 2 people in a 13x13 room, and they share a bathroom with 2 other people in an identical room. Condos almost all have their own bedroom/bathroom, are considerably cheaper, and I know my boys well enough to know they would want their privacy.

Those of you who are big on dorm life, did you have a similar situation (no privacy)?
That sounds more like a suite than a dorm. My dorm was 2 per room but with a bathroom shared with the entire floor. Didn't have a problem with privacy, though. Dorms are still far superior for the social aspect. I would have HATED not living in a dorm at least my first year, in retrospect.

It doesn't matter how social, outgoing, or friendly you are: you won't form friendships elsewhere like you do with your dorm mates.
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TxAg
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Re: Buy a condo for college?

Post by TxAg »

island wrote:
TxAg wrote:Wow, I'm surprised at all the positive comments in dorms. If your kids are friendly and outgoing, they will make friends. I would encourage them to join different groups, etc.

If the numbers make sense, then go for it. Living on campus is blah compared to having your own place. Off campus (as long as it's within 10 miles or so) is far preferable. My brother and I get along well, so it was a no-brainer for our family.
So I take it you lived with your brother off campus? Ever live in the dorms or with other people?

If you live in a college town, 10 miles away if far removed from campus life.

OP curious, where are they going to school and why do you call it the family university; you, spouse and all siblings alum? Is it in the same town you live in?
I lived in a dorm freshmen year. Didn't really care for it, although it wasn't a bad experience by any means. Living off campus is better 10x over in my experience. We lived about 5 miles away. We had a roommate in the third room. We owned vehicles so transportation wasn't a problem.

We are relatively outgoing so partaking in campus life, joining groups, making friends, study groups, etc. were never an issue. I think it depends much more on each kid's personality and drive than whether they live on or off campus.
tj
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Re: Buy a condo for college?

Post by tj »

Heyolshan wrote:
KyleAAA wrote:As a student, dorm life is far preferable for the first year or two.
This bears mentioning, since a few posters have said the same thing--at the college we are looking at, freshmen dorm rooms are 2 people in a 13x13 room, and they share a bathroom with 2 other people in an identical room. Condos almost all have their own bedroom/bathroom, are considerably cheaper, and I know my boys well enough to know they would want their privacy.

Those of you who are big on dorm life, did you have a similar situation (no privacy)?
In my 3rd and 4th years of colleges, I had my own bedroom and there were 2 bathrooms for the 4 guys to share instead of just the 1. I would never want to live off campus - as an introverted person, it was a lot easier to be involved when you live on campus. It all really depends on the school and the person though.
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