Buying a condo for a college-bound son or daughter
Many parents are now wondering – does it make more sense to buy a condo for their college-bound son or daughter instead of renting?
Parents with a son or daughter going to college in Boston are considering three options – moving their child into the dorms; having their child rent a room in an apartment building; or, buying a condo.
In many ways, it can be beneficial to buy a condo rather than living in a dorm-room, on campus, or renting. The biggest benefit: cost and savings.
A college might charge you $1100 – $1300 per month for a room in a dorm. This may be a private room, or one where your son or daughter has to share it, with a complete stranger. Your child may stay there for three or four years. Then, when they graduate, the money has disappeared. You have no return on your investment (other than investing in the future of your child).
Likewise, renting can be a black hole. It is not cheap to rent in Boston. A studio apartment will cost $1000 – $1300; a room in a two-bedroom might be a bit cheaper, say $800/month, but there are logistics, such as finding a roommate and finding a safe neighborhood and safe building. Rental buildings are not kept up as nice as owner-occupied buildings, that’s for sure.
If you are considering buying a condo, you are probably focused on several important things – safety for your child, first and foremost. Beyond that, your goal is to buy something that doesn’t cost a lot, and something that you will be able to sell three or four years from now, and, at the least, break-even, which might mean that you can sell it for what you bought if for, or sell it for what you bought it for and including all of your mortgage payments. Best case scenario, you want to be able to sell it and make a profit.
Most undergrad and graduate students want to live in the Back Bay, Beacon Hill, South End, and Fenway neighborhoods, because these areas are close to Suffolk, BU, Northeastern, and other colleges. Brighton and Allston are areas where lots of BU and BC students live.
The price of a studio in Brighton will run about $170,000 – $200,000; a one-bedroom, more like $250,000. In the Back Bay and the South End, studios will probably be in the mid-to-upper $200,000 range, and one-bedrooms into the three’s.
This might seem steep, but when compared to renting or living in the dorms, a wise financial decision.
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Updated: November 2017