I've come to realize that it's tough for parents to find information on how to find and buy a rental property for their kids to live in while they attend college. I wanted to publish an article for parents of Xavier University bound students to help guide them through the process and to promote the benefits of buying a rental property instead of paying a landlord. Above is a map of the greater Xavier University area with my recommended neighborhoods shaded in red. These neighborhoods have affordable homes, are safe, and although might not be next door to campus, will be quite reasonable for your children to occupy. As you search for listing at my website, http://www.cincyforsale.com/, or any other MLS site, compare the location of that Norwood, Evanston, or Avondale property to the above map. Seeing the neighborhood in person is of course the best way to determine if it's the right fit, so feel free to contact me for any showing needs.
If you're unsure about whether buying a home is the right move for you, consider these points.
- It's a Great Investment
If you purchased a $150,000 property and put down 20%, you'd have a monthly mortgage payment of roughly $750, including taxes and insurance. A 3 bedroom property will house two non-related students over three years of school who will be happy to call you landlord. The average rent per student in the area is $450/month. By collecting $900 per month, you'll cash flow $250.00 per month on the rental. At the end of 3 years of ownership, you will have cash flowed $9000 and paid down your mortgage by $4,496. You will also benefit with a $7250 tax write off from the mortgage interest, saving you up to $2000 per year on your taxes. The area has appreciated 3% per year on average for the last 20 years. You can expect your $150,000 home to be worth $163,500 when you sell. In the end, you'll have $17,996 of equity in the home, have saved $6,000 on your taxes, and cash flowed $9000 for a total monetary gain of $32,996. Sounds a lot better than wasting over $16,000 in rent for your child over their college career. (This does not take into account additional costs for utilities, your exact tax bracket, cost to maintain the property... but you get the point)
- Your child won't be living in a "dive"
College campuses are known for having poorly maintained rental properties with unsafe and unsanitary conditions. I know I got sick a lot more in college due to the sanitary conditions than I do now. Not only will your child appreciate the home, but so will you when you visit!
- It will teach your child responsibility
A child who has a link to the ownership of a property will take care of the property much more than they would a rental. You'll be surprised how your child will become your right-hand-partner to assist in maintaining the property. It will teach them responsibility and help prepare them to become a future homeowner themselves.
I currently live about .2 miles from campus and am surrounded by Xavier students. I know the area very well and will be happy to assist you in finding the right property for your son or daughter. If you're a first time investor, I do have several properties of my own that I manage and will be happy to assist you in getting your rental property up and running. Thanks and go Musketeers!
