Housing: A Different Way To Offset The High Cost Of College

Some families are finding new and innovative ways to save money in college.

Scholarships and grants are one thing – but the inventive are often taking advantage of entirely unrelated conditions.

One such thing is the real estate market.

It’s no secret that the cost of real estate has plummeted in recent years – and, even with prices recovering somewhat this year, houses are still extremely cheap. Interest rates are also still near all-time historic lows.

That means – in many situations – a family can save money by buying an off-campus house for a child to live in. There are pluses and minuses, of course – and today, we’re going to go over them. But if it makes sense financially, it might be worth it to see if such an arrangement makes sense for your family.

– Scott

Will buying a nearby house make financial sense while your child is in college? This is the first hurdle that must be cleared. If buying a house (or condo) doesn’t change the financial picture, then it likely isn’t worth the headache.

But in today’s market, owning a home near campus can make a lot of sense. Ask yourself these questions:

  • How long does my child’s school require on-campus living? (If it’s a year or less, you have more time to recoup value – two or more years, and you’ll need a very good deal for everything to work.)
  • What’s the real estate market like near the college? (Buying in Manhattan near NYU will never make financial sense.)
  • Can I make a down payment for the same cost as on-campus housing? (If you can, than you are breaking even, at the start.)
  • Will rent from housemates cover the monthly cost of my mortgage? (If it does, than your child can stay in the house for free, while you build equity.)
  • Can we save money cooking off-campus instead of buying a meal plan? (The answer is almost always yes – though some schools require meal plans, rendering these potential savings moot.)
  • Can I trust my child and his or her friends to treat the house with respect, and not lower its value? (There will always be wear and tear – especially so with students – but there’s a big difference between hard living and abuse.)

If you answer yes to these questions, then buying a house might make sense. You’ve spent the same amount of money as you would have on campus housing – but instead of watching it go down a hole, it has turned into (hopefully) equity in your property.

Likewise, if rent from housemates covers the mortgage (or comes close), than you’ve done better than break even – because, again, you’re building equity.


Of course, the real estate market can fluctuate – up or down – and you should consult with a qualified advisor before making any decision. However, real estate near colleges tends to hold value well, thanks to the guaranteed influx of tenants with each new class.

Still, there are other considerations. If you live nearby, you’ve got a new job – that of landlord. Maintenance will come up, unless you’ve bought a condo that has it included in association fees (and those places can have restrictions on renters). Collecting rent is often easier when the tenants are already vetted by your child – and if you’ve established a connection with the parents of your child’s friends.

If you live far from campus – or simply don’t want the potential headaches – you can have a property manager take care of your house. However, that’s an added expense, and you’ll have to factor it into your calculations.

And what you’ll do when your child graduates changes things as well. Will you be comfortable renting out to new students as the ones you know move on? If you want to sell, you probably will be able to – there will be a new set of parents with the same idea. But you won’t have accrued much equity, and the fluctuations of the market might see you selling for a loss.

Whether buying a house near college makes sense for your family involves many factors beyond the potential savings. But, with the kinds of savings at stake, more and more families are exploring the possibility.

To your college admissions success,

Scott Weingold

Co-Founder, College Planning Network LLC

Publisher, CollegeMadeSimple.com – The free educational resource of College Planning Network

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by CollegeStats.org.  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News, TheStreet.com, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.