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WHY BUYING MAKES SENSE...

First, I will say that buying is not always an option.  My parents struggled to pay the bills each month so a down payment and a second mortgage were not even a consideration.  However, for those parents with financial flexibility, buying a property for your son or daughter makes a lot more sense than renting a dorm or apartment.

According to College Board statistics, average room and board at a four-year private school is close to $10,000 per year. That’s roughly $40,000 to put a roof over your child's head.  What’s your financial return from this "investment"?  Nada. Zip. Zero.

For this analysis, let’s take a figure of $70,000 to use as a 20% down payment on a $350,000 property.

Annual Mortgage = $15,000

Annual Prop Tax = $9,000

Insurance = $1,000

TOTAL INVESTMENT = $25,000 per year

Next, let’s assume that your son or daughter has two roommates and each of them pays rent of $1,000 per month (this is often cheaper than it would typically cost for them to live in a dorm or apartment) or $24,000 per year.  This means your out of pocket costs would be about $1,000 PER YEAR!

Compare this with spending anywhere from $1,000 - $1,500 per month for your son or daughter to live in a dorm/apartment and the savings become very obvious.  Let’s assume you pay $1,000 per month for 9 months ($9,000 per year) in housing costs by renting versus $1,000 per year buying a property. 

That equals $8,000 per year in savings and $16,000 over two years for rent savings alone.  Add in a very conservative 3% annual appreciation and the property value has increased $18,000 (plus a couple thousand in additional paid-down equity).  Factoring in closing costs, your total return over 2 years could be somewhere in the range of $34,000.

RENT/DORM OPTION (2 Years)                BUY OPTION

Investment:  $18,000+                                Investment:  $75,000

Return: $0                                                 Return: $37,000 (excluding down payment)

It doesn’t make sense financially for every parent but there is a compelling case to be made for purchasing a property for your son and daughter while they attend college.  Contact Us today for a more detailed analysis in your market.

Note: These figures are for illustrative purposes and will vary depending on market factors.

TCU AREA NEIGHBORHOODS

  • Tanglewood
  • University West
  • University Place
  • Bluebonnet Place
  • Westcliff
  • Stonegate
  • Berkeley
  • Fairmount
  • Colonial Bellaire
  • Overton Woods
  • Overton West
  • Mistletoe Heights
  • Ryan Place
  • Near Southside
  • Foster Park

TCU Area Schools

  • Tanglewood
  • Westcliff
  • Lily B Clayton
  • Overton Park
  • Mclean MS
  • Paschal HS
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3417 Bellaire Park Court
Fort Worth, TX 76109
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