In the past couple of months I’ve had multiple people contact me as they explore housing options for their kids as they head off to college – either as an undergraduate coming from overseas to attend college in the US, or somewhat more locally, students from other parts of the US to pursue a graduate degree here in MN.
One parent in particular said that he had focused on tuition costs while saving for college and didn’t really give much thought to the fact that housing alone would be another $1000-$2000 / mo. Ouch. And that is to share a dorm room with between one and 3 other people.
So, maybe you start to think about renting an apartment instead? Well, rents here are not any better even if your space may be larger. Is renting a space the best way to spend your housing dollar? Possibly! But another thing to think about is buying a place and reaping the rental rewards for yourself, while enjoying possible tax benefits and putting your dollars toward an asset that you can eventually sell.
I used nerdwallet to see if this would be a “smart” move and made some assumptions – one that you’re buying a condo or a home with a purchase price of $300K and that because your family member is living there that you can put 20% down (not 25% as in an investment property). I also assumed that the interest rate would be around 3.5% which is actually HIGH for loans these days if you have decent credit. Why the BIG arrow and the underline and the exclamation point? Well, look at that payment!
This week I viewed condos that could have 3-4 students in them and were NICE listed at around $300K, walking distance or easy public transit to the U and they were getting $3000/mo in rent.
I’m quite literally sitting here wishing that I had $60K to put down RIGHT NOW so I could buy that condo and start bringing in an additional $1500/mo in rental income. (ok – this is a goal of mine for my own kid and yes, she’s only 12, and, ok, she may not attend the UMN, BUT!!!, I still have deep desires for income properties near the U.)
Median sales price in Marcy Holmes by the U over the past 3 years compared to the Twin Cities as a whole.
I even like this graph that shows that days on market are longer there – more of a buyers market! 🙂
OK – today’s video is a little tour of the area. I hope you like it. Let me know if you have questions!