Kiddie Condos: Purchasing a Second Home for Your College Student


It’s no secret that attending college can become expensive rather quickly. Tuition costs, textbooks and room and board have all continued to rise in recent years. In a study by financial analyst Mark Kantrowitz of edvisors.com, a website that covers college planning and finances, the average debt for students graduating in 2015 will be more than $35,000.

While graduating with debt has become the norm in recent years, the responsibility of paying back student loans can have a negative effect on the financial future of the borrower. Parents and students have had to come up with ways to pay for college, including tapping into retirement accounts and working multiple jobs. Saving money on the cost of education can be a huge relief for parents and students alike.

A growing trend among parents that want to offset college costs and potentially turn a profit is buying a home for their child to live in while attending college. These homes, or “kiddie condos,” can be beneficial for both the child, as well as the parents. While buying a home may not be the best solution for each and every situation, here are a number of reasons why so many parents are investing in real estate in college towns.

Kiddie Condos-webA Clean, Safe Place to Live

Many people are well aware of the reputation of college dorms. Dorms and traditional on-campus housing are not always thought of as the cleanest or most comfortable places to live. There are countless horror stories of college dorms that include bedbugs, stolen property, subpar living conditions and worse.

By purchasing a home for your child to live in, you will have the luxury of choosing a location in a safe neighborhood that is also convenient to campus and other amenities. Remember, college can be a huge transition for your child, so providing them with a stable living environment can help contribute to their success. It will also ensure that the property is a desirable one for future renters/buyers when your child graduates.

Avoid Rent Increases

According to collegedata.com, the average cost of room and board is $9,804 at four-year public schools and $11,188 at private schools. Additionally, the rental costs for off-campus housing have continued to increase in college towns due to growing demand and limited availability. These rental increases can cause headaches for you or your student when trying to budget for the upcoming semester.

Financial Stability in College Towns

Owning a home in a college town can be extremely beneficial. Each year, college campuses see thousands of students and faculty members arrive who need a place to live. Although housing demand tends to fluctuate in other places around the country, in college areas, the steady flow of students and faculty who need housing keeps demand at an all-time high. Property values have also seen a continuing rise in many college towns across the U.S.

“Assuming that property values continue to increase, it’s possible that when the parent sells the home, say, after four years of school, the value of the home will have appreciated significantly,” said Mark Orr, Manager/Assistant Vice President of Colonial National Mortgage’s Austin Branch. “The parent may be able to recoup most or all of the costs associated with the purchase of the home when it’s time to sell.”

We’re Here to Help!

Colonial offers a wide variety of loan programs with one that will certainly fit your needs. Visit the Colonial website for more information on the products and services we provide. The website also allows you to browse special programs we offer, locate a branch near you and much more. Let us know how we can help, or contact us today.

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