"Should my college student rent or own?"

Now, come on, his hardly seems like a legitimate question to ask when your child’s biggest windfall will come when he sells his textbooks at the end of the semester, but since this book addresses college parents it is definitely something to consider.

As I write this article, interest rates for homes are at all-time lows in fact, you will pay almost half as much interest on a home loan, 3.5%, as you will for a student loan, 6.8%, taken out at the same time. Not to mention the tax advantage of paying a mortgage versus paying rent. If we make some additional assumptions about the cost of renting being about the same as a mortgage payment, and about real estate appreciating at a modest 3% per year it doesn’t sound so crazy now, does it?

I would like to emphasize that I am looking at this issue from the perspective of a mid-western college town where you can still buy a tidy, two bedroom, one bath for $75,000.00 or even less if you are handy with a hammer. If your child is attending college in a location that affords you the opportunity to buy instead of rent, you may seriously consider it.

When you also consider the possibility of your child having a roommate to help pay the mortgage, or if you have other children who will attend the same college, you may be looking at an eight to twelve year, or longer, real estate investment for yourself instead of making someone else’s mortgage payment for them for the same amount of time.

If this idea has piqued your interest, I suggest doing some of your own number crunching and shopping while you visit your child throughout his freshman year. If you have never used Zillow.com, it is a great tool for comparing real estate in a specific area. Although you may consider buying instead of renting, unless you know the area well, a licensed real estate agent or Realtor is always a good person to consult before you make the leap.