College in 2025 isn’t getting any cheaper. Whatever your goals, it’ll come with a hefty price tag, including housing. Students now face steep monthly rents on top of tuition costs. Add it all up, and the total can feel overwhelming fast.
Buying a house for your child campus can be a smart financial move when your child’s in high school (or before). It can offset housing costs, build long-term equity and even generate rental income while your child is in school.
We’ll walk through the reasons buying property near your child’s school could be a smart financial move.
Contents
- Why Buy Property Near Your Child’s College?
- Can Potentially Make Money
- Strong Real Estate Value
- Housing Cost Stability
- Tax Benefits
- Low Down Payment Options
- Cons of Buying Property for Your College Student
- Upfront Costs
- Time Commitment = Real
- Tax Headaches
- Tips to Make the Decision Worth it
- Buy the Right Kind of Property
- Rent Out Extra Rooms
- Do the Math Before You Buy
- Set Aside an Emergency Fund
- Learn the Basics of Taxes and Ownership
- Plan Your Exit Strategy
- Is it Smart to Buy a House While Your Child’s in College?
- FAQs
- Can a college student get a mortgage?
- What’s the minimum down payment I need?
- What if my child wants to move after graduation?
Why Buy Property Near Your Child’s College?
Buying a place to live during college might initially sound a little extreme, but hear me out. It’s not just about ditching cramped dorms or avoiding ever-climbing rent prices. Owning a home near your child’s campus could make you money while your child studies. Sounds wild, right? Let’s break it down.
Can Potentially Make Money
According to Rent.com, the average cost to rent a single room in a student apartment ranges from $700 to $1,200 monthly, depending on the area. This means that if you rent a three-bedroom condo for your child, they can live in one room and you rent out the other two for $900 each. That’s $1,800/month in rental income.
Your total monthly mortgage, property taxes, and insurance are about $2,000. That means your child’s roommates cover 90% of your housing cost. That income may cover the entire mortgage or give you some profit.
For comparison, how much does it cost to live on campus? For example, next year, the University of North Carolina Chapel Hill will cost $8,570 for housing and $6,468 for food for a total cost of $15,218 for that year (not including the next three years or more).
But the upsides don’t stop there.
College towns usually have strong real estate value. A 2023 National Multifamily Housing Council report found that most college towns maintain occupancy rates of 95% or higher and experience less volatility than big cities. As property prices rise, you build equity — aka, long-term value. So by the time your child graduates, you’re walking away with an appreciating asset.
Translation: Student housing demand stays strong year after year. Even a modest 3% annual increase means a $200,000 condo could be worth $231,800 in just five years.
Real estate strategist Seth Williams of Reference Real Estate says, “Buying property near a college campus is one of the smartest long-term plays in real estate. You’re locking in stable housing costs while tapping into a built-in demand stream — students.”
So instead of burning money on rent every month, you could build wealth and create passive income while your child attends classes.
Housing Cost Stability
One of the biggest perks of buying a home: No more surprise rent hikes.
Landlords often increase your rent every year. However, when you possess a home with a fixed-rate mortgage, your monthly housing costs stay predictable, making budgeting easier. (No rush to handle a sudden $200 rent increase next semester: Score!)
Consistent rental income from your child’s roommates can also offset a good chunk of your monthly mortgage, giving you even more financial breathing room.
Tax Benefits
Talking about taxes is not exactly thrilling, but it’s very rewarding when you know how to play it smart. Owning property while in college can actually come with some surprising perks:
- Mortgage interest deduction: If you take out a mortgage to buy a home, you could deduct the interest paid on it from your taxable income. This matters because in the early years of your mortgage, most of your monthly payment goes toward interest, not the actual loan.
- Property tax deduction: Owning the property means paying property taxes. But guess what? You might be able to deduct those, too.
- Depreciation: As a landlord (yep, that’s you if you’re renting out rooms), the IRS lets you “depreciate” the value of your property over 27.5 years even if it goes up in value. Let’s say the rental portion of your property is worth $150,000. You might be able to write off about $5,455 a year as a “loss” on your taxes while still making rental income.
Low Down Payment Options
Think you need 20% down to buy a place? Nah, that’s a myth.
If you qualify for an FHA loan, you could purchase a home with just 3.5% down. Some first-time buyer programs even offer 3% down through conventional lenders.
Additionally, there are down payment assistance programs available.
Cons of Buying Property for Your College Student
What are the downsides of purchasing property near your student’s college? Let’s take a look at the other side of the coin.
Upfront Costs
Upfront costs are no joke. You’ll owe quite a bit of money in upfront costs:
- Down payment (between three and six percent of the overall amount)
- Closing costs
- Inspection fees
- Appraisals
- Move-in upgrades
It adds up fast.
And this is before you even buy furniture or start paying the mortgage. It’s important to note that rent costs way less upfront!
Time Commitment = Real
Owning a property is like having a part-time job. Even if you hire a property manager (which costs $$), you’ll still be involved in the following:
- Collecting rent
- Managing utilities
- Coordinating repairs
- Finding new tenants every year
That’s a lot to juggle.
Vacancies = Lost Income
Let’s say you’re banking on roommates to cover your mortgage. Cool.
But what if your child can’t find someone for summer break? Or someone suddenly moves out?
It’ll suddenly be your mortgage payment. Even one empty room for a few months can significantly impact your entire budget.
Tax Headaches
Sure, we mentioned all those sweet tax perks earlier. But you have to understand the tax code. Or pay someone who does. Depreciation, rental deductions, 1099s, capital gains are all a lot to learn.
Tips to Make the Decision Worth it
If you don’t want to waste your investment and make money, here are a few tips.
Buy the Right Kind of Property
Don’t go for the biggest or fanciest place on the market. Look for something low-maintenance, close to campus and easy to rent out. Think: Three-bedroom townhome or condo with solid resale value.
Rent Out Extra Rooms
Let your child live in one room and rent out the others. Let your roommates help cover the mortgage, maybe even all of it. That’s called house hacking, and it’s one of the smartest ways to build wealth.
Break down the numbers: mortgage, taxes, insurance, repairs. Compare it to what you’d pay for rent. If it doesn’t save you money or make you money in one to two years, it might not be worth it. If your child will only stay in the home for a year, buying might not make sense. But if they’ll be around for three to five years, that’s enough time to build equity, make rental income, and watch your property appreciate.
Set Aside an Emergency Fund
Stuff breaks. Tenants flake. Life happens. Have a cushion for surprise expenses like plumbing, pest control or a gap in rental income.
Learn the Basics of Taxes and Ownership
You don’t need to become a CPA, but you should understand property taxes, insurance, write-offs, and how to report rental income. The IRS gives you perks if you know how to claim them.
Plan Your Exit Strategy
What happens after graduation? Will you sell it? Keep renting it out? Will your student continue to live in the house? Knowing your long game makes it way easier to decide if buying is worth it now.
Is it Smart to Buy a House While Your Child’s in College?
Yes, it can be if you play it right, and timing is everything. You’ll want to purchase at the right time, meaning you’ll want to consider when to buy. Will you buy before your child’s freshman year or during the first year of graduate school?
Buying a house in college means locking in steady housing costs, building equity and potentially generating rental income on the side. You’re not just paying rent, you’re investing in you and your child’s future.
But it’s not for everyone. You need good credit, some savings and the patience to handle repairs and your child’s messy roommates. If you’ve got the support and the mindset, it could be one of the smartest money moves you make.
FAQs
Can a college student get a mortgage?
What about your child buying the house instead of you? They can do it, but it’s tricky. Most students don’t have much credit history or income, so they’ll probably need a cosigner (like a parent) or a solid part-time job and good credit to qualify.
What’s the minimum down payment I need?
It could be as low as 3% with specific first-time buyer programs or 3.5% with an FHA loan. Check with your lender to learn more about your options, including the potential loan term you might opt for.
What if my child wants to move after graduation?
No problem. You can either sell it, keep it as a rental, or keep it for them to move back into after graduation, possibly for graduate school. Just make sure to consider your exit plan before making a purchase.