Everyone knows college is expensive. Tuition costs aren’t the only reason. Room and board can also be rather expensive. In fact, it’s quite possible that it would be more than the mortgage payment on a new house. That means it may actually be financially beneficial to just purchase a house for your college kid, instead of sending them to the dorms or campus apartments.
Of course, this depends on multiple factors. Of course you’ll need to take into account the actual cost of room and board as well as expected mortgage payment for the property, but there are other financial considerations as well. You’ll need to be able to afford a down payment, first of all. Are you able to turn it into a profit opportunity by renting out some of the rooms? If so, do you need to hire a property manager? Once your kid graduates, are you going to keep the house for them, sell it, or continue to rent it out?
There are additional considerations that aren’t necessarily even financial. How far away from your kid do you want to live? Maybe you should consider moving with them, if that’s a possibility for you. Is giving your kid the responsibility of owning a house a good learning opportunity for them, or is it just going to result in disaster? Are you sure that they will continue at this school, or is it likely they’ll either drop out or transfer? This option certainly isn’t for every family, but it’s a strategy that most families don’t consider.
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