Why Buying a College Rental Is Smart
It doesn’t take a genius to know that college is expensive. Tuition, textbooks, food, gas – among many other essentials for any college student can add up quickly. Wouldn’t it be nice if parents and students could save up to 10k a year in college expenses? Compounded over 3-4 years that money saved could quickly add up to 30-40k of money saved in the bank and not forfeited over to yet another college expense.
“Yeah Max, that sounds great but there’s no way you can save up to ten thousand dollars a year…” Not so fast!
Let’s do some quick and easy math. Let’s say a parent or student is currently spending $800 a month in rent, annually they are spending $9,600. Not to mention the security deposit and utility bills associated with living in an apartment complex or an on campus rental. (These are conservative numbers and some students/ parents are paying less than $800- however, many are actually spending way more for rent than $800 a month.)
Regardless, if a parent were to instead take that money and intelligently purchase a rental house for their children, they could eliminate their biggest expense and even make money for where they live!
“Woah, woah… pump the brakes. You mean to tell me where my child lives can actually make money?” That’s exactly what I’m saying!
Let me preface this by saying that while in college, I lived in an apartment, I worked at an apartment complex, and I purchased a rental property in the way that I’m describing in this article. So I feel uniquely qualified due to the fact that I’ve seen these scenarios from all different angles and I wish that I had purchased a rental property my sophomore year as opposed to my senior year! By using this method I’ve eliminated my biggest expense and I hope I can help you do the same for you or your student.
A 120k home on a 30 yr note with a 10% down payment would roughly equal a monthly payment of $1,000. If the student shared the house with 2-3 of their buddies paying $500 a month each, after paying the note and utilities you could actually make money each month instead of forever losing it by paying for a rental. Not to mention the monthly contribution to equity and the possible appreciation of the property over a 2-3 year time period. These numbers are just an example, however, there are several opportunities like these in my market that I would love to help you find for you and your student!
If you are a parent looking to eliminate your student’s housing expense or a student looking to eliminate your own – let’s talk! By using me as a buyer’s agent you wouldn’t have to pay me a dime. While my main area of expertise is in Oklahoma, I know people all over the country so even if you’re not looking to buy here don’t hesitate to reach out!
Thank you for taking the time to read this article and I hope it has provided you with some value moving forward!
Max Vrana is a Wealth Builder at Rise Realty Group and Keller Williams Realty. He has a passion for assisting clients with the process of purchasing and selling what is likely the biggest transaction of their lives!