Parents Seek Equity Dorms Can’t Offer

Student housing has become an investment opportunity for many parents sending their children to college. In some cases, buying a condo makes better financial sense than paying for a dorm room. College Board says between 2011–12 and 2016–17, tuition and fee prices rose by 9 percent in the public four-year sector, by 11 percent at public two-year colleges, and by 13 percent at private four-year institutions.

A report by the National Center for Education Statistics shows that, for single college students, on-campus housing is more expensive than off-campus by between 1.1 to 40.9 percent. Redfin also compared the monthly dorm rate at 195 U.S. public colleges with the median monthly mortgage on a condo in each of those cities. Their findings suggest it’s more cost effective for students or their parents to buy a nearby condo at 47 colleges.

Pro Teck Valuation Services’ Home Value Forecast compares college housing fees to the cost of owning a condominium in specific metros. Results show that Seattle is the most expensive, at $519 per square foot, while College Station, Texas, is the least expensive, at $125 per square foot. For condos that are relatively equal in price to a college dorm, renting out a room can serve to o set utilities, taxes, and insurance costs.