Cheap Student Housing: Buy a Home While You're Still in School

Ranna McNeil footed her college housing costs in a way few students think of. As a freshman at Pennsylvania State University, she purchased a four-bedroom home in York, Pa. For much of her college career, McNeil paid the mortgage and utilities by simply renting out the spare rooms.

"It was great because when I had renters in the house, I essentially didn't have any major living expenses," says McNeil.

Seven years later, McNeil, now a 32-year-old finance manager for a local architecture firm, is getting ready to move out of her college home into a new place near Harrisburg, Pa. Unlike most grads just applying for their first mortgages, McNeil is leaving her college town with seven years' worth of home equity under her belt, giving her a significant fiscal jump on her tassel-turning counterparts.

"It was a good thing to do, because now I'm in a really good place," says McNeil, "but it wasn't easy."
"Since I was going to school full-time," McNeil recalls, "it was hard to come up with money for emergency things, like when the furnace went out."

Buying a home in college isn't as simple as just signing on the dotted line and finding a few renters, explains Greg Cook, a real estate and mortgage broker with the First Time Home Buyer's Network in Southern California. On top of concerns about landing a mortgage with no income, saving up enough to cover emergency expenses, ponying up for taxes and insurance, and figuring out what to do if a renting situation goes sour, Cook adds that students and their parents should be aware that the home could lose value.

"The most important consideration is whether the local market makes [a collegiate home] a good investment," says Cook. "In a flat or declining market, unless [the student and parents] are experienced landlords who understand the downside, this may be among the riskiest investment strategies."

Before making a purchase, students and their parents (who may provide some or all of the down payment) need to assess whether area housing values are increasing and come up with a game plan on what to do with the house after the student has graduated.

"An added feature of purchasing a home in a college town is that there will always be an influx of students moving into the town," says Jody Keating, a real estate broker with Connective Realty in Bryan, Tex. "That means that there will always be an abundant source of renters and buyers."

To make sure your college home is a wise investment, Keating recommends consulting area Realtors on local home values. Potential buyers can also consult online resources like

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