Spoiled kids or Smart Parents? A Look At College Station Condos
Posted by Chris Tesch on Tue, Oct 27, 2009
I've met a multitude of people who remark on the amount of parents buying College Station condos or other properties for their students. There are two emotions most of them express at the time either envy because their parents didn't do anything like that for them, or consternation at the fact that the students are living so lavishly.
I don't think anyone would disagree with the fact that our kids are living in, for the most part, much nicer conditions than their parents were during their college careers. That being said the reality is that they will either spend the money on rent or on a house payment.
If your student is planning on attending Texas A&M or Blinn College for three years or more in most cases it's advantageous to buy student housing as opposed to renting it. Even during this economic downturn the prices haven't soured (though they have for a brief period not appreciated) in this segment of our market as a steady supply of students are coming in and leaving each year. If the market does happen to take a turn for the worse (an unlikely possibility probably) then you can keep it for investment property and rent it out until conditions improve.
One typical scenario: A parent bought a 4/4 condo in Waterwood for $149,000 at the beginning of their students sophmore year. Putting down 20% they finance $132,000 on a 30 year note at 5.5%. Payments would hover around $1200 a month with the Waterwood homeowners association of $120 factored in. Renting 3 rooms out at $450 each, the parents are able to make the payment without spending anything for housing for their child.
In 2009 the condo they purchased costing $149,000 sells for $165,000 giving them, at the end of the three years a profit of $16,000. Even with real estate closing costs factored in the profit would be around $6,000. During the three years they lived in the condo the student hasn't incurred any rent and the parents end up with an overall profit of $6000. Compare that to renting. Month after month the student (ie the parents) end up paying $450 a month for the student to share an apartment or home.
I believe in the concept of owning student housing so much that my daughter, a college freshman, is in our condo currently! It seems like a clear choice given the alternative! For more information on potential properties for your student call or email me!