If you’ve got a kid in college, you’re undoubtedly suffering from sticker shock and it’s not just from the cost of tuition and mandatory fees and books and a meal plan and parking, but also from housing. Maybe, especially, from housing. The high cost of rent in Charleston has a lot of parents talking to us about purchasing property for their college kids to live in, and for the price they’re expected to pay – many may be envisioning the Taj Mahal.
Chart provided by rentcafe.com
Yes, it may be that buying a property for your college kid to live in is a smart financial decision. The average price per year for housing in Charleston is much higher than your typical college town. If that has you getting ready to search for homes for sale right this second, don’t forget to factor in the additional costs of homeownership like maintenance expenses, HOA fees, insurance (including flood) and taxes.
You can enjoy a tax write-off on a second home, which could make the purchase much more affordable in the long run, but you have to be careful about how the property is used and the way it is reported on your taxes. Different tax rules apply depending on how you use the property, so make sure you consult your favorite tax genius first.
Property in Charleston is appreciatin’ y’all so it might be a good investment to purchase a property that you can sell after graduation for a nice property or hold onto for passive income by keeping it as a rental.
Then again, there is the chance that entrusting your child, and your child’s roommates and friends with a property you own could spell financial disaster if the home is not maintained. Worried about parties that trash the place and/or illegal activities like drug use? No, not your angel – we’re talking about their roommate of course. If you’re thinking about buying a property for your child (and other people’s children as well) to live in, you need to have an honest conversation with him or her about the responsibilities involved.
In some cases, parents purchase a condo or townhome in the city for their college student to live in, with the intention of keeping it in the family for the child post-graduation, or for another child intending to attend the same college, or even as a place for themselves. We’ve seen a lot of parents follow their kid to Charleston as part of their retirement plan. If you weren’t thinking about retirement in Charleston, wtf?
Having to find a new place to move every year, find storage, and put down new deposits is a drag for anyone. Buying a home that junior can live in for his or her entire college experience provides stability, as well as a fixed expense they (err, you), can count on.