23 College Towns Where Buying a Home Costs Less Than Student Room and Board

A Mortgage Research Network analysis reveals that in nearly one-fifth of 121 U.S. college towns, purchasing a home for a student's college tenure is more cost-effective than traditional room and board options. This study, which factored in all housing-related expenses and potential appreciation, identified 23 locations where families could save money and build equity, with Temple University showing potential savings of nearly $30,000 over three years. This trend underscores the escalating costs of college housing and presents an alternative investment strategy for families.

Analysis

A recent analysis by Mortgage Research Network indicates that purchasing a home is more cost-effective than traditional room and board in 23 out of 121 surveyed college towns, representing nearly 20% of the sample. This finding underscores the escalating costs of college housing, positioning homeownership as an increasingly viable alternative for families seeking to mitigate educational expenses. The study's methodology was comprehensive, factoring in mortgage payments, property taxes, insurance, closing costs, maintenance, rental income, and expected home appreciation over a student's college career.

Notable examples include Temple University, where buying could yield $29,742 in savings over three years, and Marshall University, with potential savings of $18,805. These figures highlight significant financial advantages for families in specific markets, allowing them to build equity while simultaneously addressing student housing needs.

This data points to a niche investment opportunity within the residential real estate sector, particularly in these identified university markets. The potential for families to build equity and reduce educational housing expenses presents a compelling alternative investment strategy, contributing to the moderately positive sentiment surrounding this finding, although the overall market impact is low.

Key Decisions for Investors

• Investors should evaluate residential real estate opportunities in the 23 identified college towns, considering the potential for consistent rental income from students and long-term property appreciation.
• Monitor local university enrollment trends and housing supply dynamics to assess sustained demand and investment viability in these specific markets.
• Conduct thorough due diligence on property management and potential vacancy rates, given the transient nature of student tenants and the specific market conditions.