With so many great universities and colleges found throughout the Boston area, this question comes up often for parents. Should you rent an off-campus apartment for your student or buy an investment property?
It’s a unique choice and with all the small towns throughout the area, it may be a place to invest or it may be better to rent. Here’s a look at the options and how they may play out for you.
Renting an Apartment Off-Campus
Sure, you give your child the opportunity for a little freedom and they get to stay off-campus, but you get very little in return. Renting an apartment appeals to those looking to have a landlord for their student to call when something is in need of repair. However, it also means for the next few years, you’ll be paying for rent without getting anything in return at the end of the lease.
Investing in a Boston Property
Usually, real estate is better and safer to invest in than the stock market. If you were to purchase a multi-family property and allow your student to stay in one unit, you’d have several other units to rent out to other students. This allows you to not only collect rent but also build equity in the property.
Not only will this strategy provide an investment for now and the future, but it’s also often cheaper than renting an off-campus apartment. Even with a single-family home, your student can take on roommates that pay you rent. This could mean you have a place for your student to stay and your mortgage payment is basically paid for every month.
In the End, You Own the Property
Maybe your student plans to live in the area for several years while they are in school and possibly after they finish. By investing in a property instead of renting, you’ll have something to show for the money you’ve spent when they are ready to move on. You can keep it as an investment property and rent it to another student or you can sell it and cash out your investment.
It could become a retirement revenue stream as you rent out multiple units to ensure you have an income source for many years to come. There will always be students in the Boston area looking for a place to stay off-campus. As long as you’re okay with being a landlord or hiring a property management company to be your landlord, you’ll be able to continue collecting rent checks.
Cheaper to Buy, in the Long Run
Renting is cheaper up front. You just need a deposit and the first month of rent and you’re in. However, buying is cheaper in the long run. While it may cost more to buy the home up front, you’ll be able to hold onto it and collect rent for as long as you would like. Then, you get to cash out in the end and make a profit instead of calculating how much money you spent on rent, which you will never see again.
The answer to the question won’t be the same for everybody. However, if you’re in a position to buy an investment property for your student to live in, it may be the best choice in the long run.