The Financial Benefits of Relocating to Your Child’s College Town

Sending a child off to college can be challenging financially and emotionally, especially over significant distances. Independent living in college can help your child mature and grow, but it can also add a lot of extraneous expenses to their tuition that many families do not have. Even if your child secures a part-time job during school, it may not help pay for all of their room and board. 

As a cost-saving alternative, it’s not unusual for parents to purchase a home near campus to remain close to their children during their college years. Not only does buying a home near your child’s college help you stay close and involved in their lives, but moving during college can be a smart financial decision in many circumstances. While this option isn’t suitable for all families, you may want to consider the potential economic benefits before making a firm decision.

Daily Commute Savings

Depending on you and your child’s schedule and transportation methods, relocating to their college town can save them (or you) a ton of money on the commute. If your child needs to use public transit or ridesharing to travel long distances, those costs can add up during the semester. If you’re there to provide rides or cars for them to use, those travel expenses can be saved. You can also provide a safe and sober means of transportation for your child, which is never a bad thing; moving closer to them can help with this.

Reduced Housing Costs

Paying for your child to live in a dorm or rented home near campus can cost a lot of money. While you’ll pay similar costs per month for a mortgage (unless you are paying in cash), the money goes toward a home you’ll own—an asset. If you and your child are living in the house together, you won’t have to worry about separate lodging expenses. 

Depending on the home, market, and mortgage, you may even pay far less for a new home per month than your current living situation. In order to lock in an ideal mortgage rate, be sure to compare lenders and rates, understand your mortgage options, and research homebuying programs in the state or county you’ll need to buy. Getting loan insights from Mr. Rate can also help you make a more informed decision about smart home purchases. You’ll also want to see what type of homebuying programs are available to you as a new resident; you may save a ton of money on your down payment, interest rate, or closing costs.

Less Long-Distance Travel

When a semester ends and a lengthy break starts, they may want to come back home to save money or visit you. Depending on how far the college is from your home, this can cost a lot of travel money, especially if airfare is involved. Round-trip airfare can cost hundreds of dollars, and if they study overseas, you’ll have to spend thousands per trip. Fare doesn’t even include travel purchases like hotels, airport meals, baggage, parking, car rentals, and more.

Your time together will also be limited to short semester breaks; your child may miss out on birthdays, vacations, or other important dates. When you live near campus, your child doesn’t have to worry about traveling on a break. You won’t have to spend hundreds or thousands on airfare or train fare. Living nearby will help your wallet immensely while allowing you to see your child more often.

Lower Cost of Living

Do you live in an area with a high cost of living? Groceries, property taxes, and insurance rates can make saving for retirement or college difficult. If your child’s college is in a state with a lower cost of living, you can save a lot of money and enjoy more expendable income. Compare the cost of living in your current state to your child’s college state. Many college towns are more affordable to accommodate the young student population, especially when compared to larger cities. When you pay less for daily expenses, you can focus more on savings, supporting your child, or spending more on fun.

Meal Savings

When your child lives independently on campus, they will need to pay for groceries or college meal plans themselves in many cases. These meal plans are expensive, as they provide food for entire semesters. Even if room and board includes meals, these living costs can add up to thousands of dollars each semester. When you live near your child’s campus, they can come home for meals, and you’ll see much lower meal costs. Sharing the grocery bill is beneficial for both of you, especially if your child has specific dietary needs, preferences, or restrictions. You will no longer have to worry about meal plans or expensive room and board costs since you provide the room and board for them!

Rental Income Potential

You may have the space for your child to host roommates in your new campus home, which can be a great opportunity to generate rental income to offset the purchase. If you only live in the home for a portion of the year, you can also allow short-term rentals when the house is unoccupied. You can live rent-free with the right amount of rental income! When your child graduates, you can continue to receive rental income even when you both move out. College towns make it generally easy to find tenants, as college students and families will always need lodging each year. Keeping the home and renting it out may earn you more income over time than selling it entirely.

Potential Tax Benefits

Depending on where you currently live and where your child’s college is, you may have additional tax benefits when you relocate. Some states have no state income tax, like Florida. Other states may have lower property taxes to help you save money on your new home. If you decide to rent out the house, you will likely be able to claim tax deductions that lower your tax bill each year. Compare the tax benefits of where you currently live and the state you’ll be moving to in order to see if you’ll see some financial benefits with a move. States like New Jersey are notorious for high property taxes, and you may save money with a move away from areas like these. You may see fewer tax benefits when you relocate, so research is key.

Scholarship Access

While many scholarships are offered regardless of a student’s location, some exclusive scholarships are provided to local or state residents only. When you and your child move closer to the college campus, you may see an increased amount of scholarships to help your child afford some or all of their tuition. Scholarships are financial rewards offered by the university or third parties to help cover tuition costs. Usually, scholarships will have a certain requirement, such as writing a compelling essay, having a certain major, or belonging to a certain minority group. Sometimes, location can play an access. Local companies may offer scholarships to local students. Research the school’s scholarship options to get a good idea of the requirements. Keep in mind that scholarship requirements and amounts often change each year.

Job Access

Unless you’re moving from a major metropolitan area, a college town will likely have more job access for your whole family. Colleges provide plenty of employment opportunities in many fields, including medical, teaching, and hospitality. Regardless of your area of expertise, you’ll likely find some ideal opportunities in a college town. When you move, you may need new employment, so job access is crucial. Even if you don’t need employment options, your child may want to start working to help provide spending or saving money. College towns also thrive on providing ideal part-time jobs where students can easily balance school and work. These roles may also be beneficial when you retire and want some extra income.

Lower Healthcare Costs

Major college towns typically have excellent medical centers affiliated with the university. These college medical centers often offer more affordable healthcare as part of their student training programs. From hospitals to dentists, universities will offer much lower healthcare rates to allow recent graduates and training students to learn from real patients. The healthcare you receive will still be of the highest quality and safety, but you’ll find more attractive rates. Health insurance companies may even offer exclusive discounts for using campus medical facilities. Even outside of campus, medical costs are generally lower in college towns, especially when compared to larger metropolitan hubs. Healthcare providers may offer healthcare savings plans or exclusive discounts for college students, too.

Affordable Amenities

College towns are packed with fun things to do and sights to see, from concerts to sports games. To draw in the college student audience, many of these amenities are provided at lower costs than in larger cities, and sometimes, they’re even free. You can include more leisure activities in your budget without spending a ton of money. If you’d like to get more education under your belt, some adult classes or seminars are free and convenient to get to due to your proximity to campus. Many universities offer enriching art museums, community gardens, history exhibits, art fairs, and other campus events that you won’t find in other towns. As a bonus, many of these excursions are completely free.

Post-Graduation Investment

After your child graduates, you both may wish to relocate when no longer tied to the college campus. Buying a home isn’t necessarily a bad choice in these circumstances; the house will be a valuable asset for you or your child to rely on. You can sell it to pay off the mortgage or help your child get on their feet. Homes near college campuses are hot and can sell for ideal rates, or you can collect substantial rental income as an alternative. Regardless of what paths you or your child take post-graduation, buying a home can help keep your finances on track. If you’re interested in real estate investment, you can consider it part of your portfolio! You may even want to buy additional real estate in the same town to enjoy the college student rental income. 

Retirement Benefits

Some states are financially friendlier toward retirees than others. Buying a home near your child’s campus may yield some of those benefits if you stay in the home long-term. Some states don’t tax retirement benefits, allowing you to save more during your golden years. College towns offer a lot of amenities and walkable areas without having to pay a ton of money for expensive retirement towns. Even if your child leaves the state post-graduation, you may find the area attractive to retire in. When you don’t have to spend money on retirement, you can save more and enjoy similar amenities.

Will You Relocate to Your Child’s College Town?

Not all families will want to purchase a new home in their child’s college town. Some families may have multiple children going to different colleges, so living nearby isn’t viable for everyone. Purchasing another home may not be affordable for all. Other families may not want to live in their child’s college town for various reasons. It’s important to assess your current lifestyle and financial situation to determine if buying a home close to your child’s campus is right for you.

Another point to consider is the fact that living at home may limit your child’s ability to learn about independent living in their college years. If you’re concerned about your child’s growth and independence, you may want to find other methods to save money during college. They can also take advantage of different opportunities to live independently, such as summer camps or travel groups.

In conclusion, you should compare your current living situation to your child’s college town. Compare property tax rates, home prices, job access, and other costs of living. While purchasing a home near your child’s college can be a very smart move financially due to job access, lower living costs, and fewer travel purchases, you’ll want to put your family’s goals and needs first to make the most informed decision.