Every August in college towns across the country, college students start to return for the fall semester, resulting in a frenzy of real estate activity. Because rental housing tends to be tight in most college towns, many families consider purchasing a home for their college student to live in while attending school. It usually takes 30 to 60 days to close on a home, so the time to start looking for that perfect place is now.

A college property purchase can prove to be an astute financial investment as well as a superb learning experience for the student. In Boulder, if a parent bought a condo in the 1980s and held on to it for four years, they most likely would have sold it for about what they paid for it. On the other hand, if a parent bought a condo in 2012 and sold it in four years, they most likely would have made enough profit to pay for their child’s in-state tuition at CU-Boulder.

Owning the property a student lives in while attending college can offer several benefits. The student will have a greater sense of stability by not having to look for a different apartment to live in each year. You, as a parent, can pick the lifestyle that will help your student succeed in school by choosing the location and the quality of housing that best fits his or her needs. Over the past few years, apartment rents in college towns have typically increased on an annual basis. By purchasing a property with a fixed-rate mortgage, your student’s housing expenses will be fixed. In addition, your student won’t have to deal with paying security deposits, going through the hassle of getting the deposit back or worrying about storing furniture over the summer break. Moreover, during the process of purchasing a home for your student, you will be providing your child with an excellent learning experience. Your student will gain insights into the process of investing in real estate and will also learn about the responsibilities that go hand in hand with property ownership.

In my own life, both of my sons attended CU-Boulder, and I bought each of them a condo using owner-occupied FHA financing. Each lived in the unit and had a roommate who paid rent to help cover the monthly mortgage. At the end of their college careers, my sons had built up significant equity they could use in the next phase of their lives.

I have also had clients who have bought real estate for two, three, or more of their children to live in while attending college. In some cases, this spanned 10 years. Rather than throwing money down the “rent drain,” they have built equity in a real estate investment over this period of time.

Here’s a simple worksheet to help you determine the month-to-month expenses for owning a condo or house for your college student while you evaluate if this is the right decision for your family:

In my next article, “Part 2: College Home Buying Starts Now,” I will provide you with a list of items to think about and plan for when deciding whether or not to buy a condo or a house for your college student. house for your college student.

By Duane Duggan. Duane graduated with a business degree and a major in real estate from the University of Colorado in 1978. He has been a Realtor^® in Boulder since that time. He joined RE/MAX of Boulder in 1982 and has facilitated over 2,500 transactions over his career. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail duaneduggan@boulderco.com, call 303.441.5611 or visit BoulderPropertyNetwork.com.