So you’re sending your child off to college,
Sounds expensive right? Usually that would be the case.
Every penny counts, especially at this time in your life. So how could you save money or even make money off of your students living situation?
Everybody knows that dorm rooms are cool for about the first week. Then comes the point where your son or daughter realize what little bit of space and privacy they have. Which is shocking considering the prices people pay to live on campus. For example one local University charges $2,795 a semester for a 13’6″ X 10’10” bedroom that you SHARE with another person, and a bathroom you share with 3. I have seen walk in closets bigger than these “bedrooms”.
To put this into perspective, a semester is about 4 Months. That is roughly $700 a month to live in a shoe box of a room, with another individual.For that much you could afford to pay for a 3-4 bedroom home near the school, similar to this house for sale in O’Fallon, Missouri.
Every student or parent who has ever had to write a check to the Universities Housing office, knows there must be a place they could rent cheaper. What if you could rent some of those extra rooms to them?
Now this is where the gears start turning in your head, and the numbers start crunching. Seems crazy right?
Well, let’s look at the things you need to consider first before sending your child off to college with a set of keys to a new investment.
1. Location is EVERYTHING. There are very few colleges left where there is enough room for students to park, so making sure there are bus routes or that the property is within walking distance is smart.
2. Make sure your son or daughter can network throughout the school. Try finding friends, study abroad students, locals, or just any student who needs a place to stay.
3. DO YOUR RESEARCH. Offer competitive pricing. Make sure you offer a competitive price compared to the apartments in the area, and the colleges campus living spaces as well. But do not under charge yourself. If you price the rent correctly, you could easily bring in 125% of the mortgage payment.
4. Make up a legal contract for the students to sign. Just like one they would need to sign if they were renting any other living space.
5. Get a security deposit, and make sure they understand that they will also be splitting the utilities among themselves.
6. Make sure the living spaces are up date, clean up the property as much as you can. Make sure it is very appealing. Not only do you need to appeal to the likes of the students, but to the standards of their parents. The parents will most likely be paying for their son or daughters living expenses. Don’t forget you’re not the only one who is dealing with the stress of sending your children off to college.
7. Consider your long term plan. Once graduation comes around there are things to consider. The home could continue to be rented. Your son or daughter could even keep the home for themselves, and finish paying the rest of the mortgage. A final option could be to sell the home and hope to make a profit on the appreciation it has gained over time. Here is a video of Jim Manning from STL Real Estate talking about the appreciation of houses over the next year, and what they are predicting the market will look like in his 2nd Quarter Market Update Video.
8. Make sure to budget carefully. Find a mortgage that you can afford monthly, but that you also know by renting out all of the rooms you can make more then the monthly payment. Don’t forget about things you will also have to budget for, such as taxes, and possible repair costs you will want to set aside.
9. Don’t forget about the summer time. Make sure to try and find students that may stay for a summer job or internship in the area. Or network with the students from abroad that would rather stay in the states for the summer.
10. If you think about this for just a moment, your son or daughter could now be living in a house virtually rent free, only to worry about their share of utilities. You would also have the peace of mind knowing where your son or daughter is living and who they are living with. All while making a smart investment.
So when you are sending your child off to college next year, don’t forget about this opportunity that could save money in your wallet and hair on your head!