Incoming college students and their parents may be facing a few other problems aside from the rising costs of tuition.
With the economy still in recovery due to the impact of the coronavirus pandemic, housing arrangements at university has become a concern for both students and parents.
Kiddie Condos
Monkey Business Images/Shutterstock | On average, a student would have to spend up to $12,990 at private colleges on just room and board
In the past years, families have found that they can save a lot of money when it comes to dorm room fees if they choose to buy property dubbed as ‘kiddie condos’ for their children to stay while in school.
The plan usually entails only keeping the condo or house for the four or so years that their kids spend in university and then sell the property to get even or for a profit once they graduate. This set up worked particularly well before the coronavirus pandemic affected all facets of the economy.
Some families even say that they ended up saving as much as $40,000 by owning a property short-term rather than having their college-age kids live in campus housing.
Risky Investment
LightField Studios/Shutterstock | The earlier months of the pandemic saw home sales plummet
Given the record low mortgage rates available today, some may think that going this alternative housing route is still their best option. There’s also the fact that living alone would help their kids stay socially distant should they have to return to university amidst the health crisis.
However, experts warn that buying property now may not be as sure an investment as it was a year ago. North Carolina A&T alumnus Malcolm Ethridge, for example, had trouble selling the house he bought as a third-year college student when he graduated into the Great Recession over a decade ago.
He ended up being an unwilling landlord for the eight years that followed as he continued to pay for the home’s mortgage. In the end, he sold the property for $98,000 a little bit less than its original price.
Things to Consider
Rido/Shutterstock | Another factor parents need to consider is whether their kids would have the option to take classes online
Because of his experience, Ethridge, who is now a certified financial planner, advises his clients to think more carefully about investing their money on a property right now.
His sentiments are shared by other financial experts who warn people of the tumultuous times the economy is going through. Some of them are also encouraging parents to have their kids live on campus as it can greatly benefit the students’ social life despite the costs.
Studies show that college students who live on campus are more likely to complete their degrees.
