Can student housing really be a good investment?
While rising tuition costs grab the headlines, the bulk of the cost for sending kids off to university is actually four or five years of food and lodging.
At the University of Toronto, residence fees vary and increase every year; throw in a meal plan and an approximate average is $10,000 per year.
Instead of forking over even more cash to the university or nearby landlords, some enterprising parents prefer to buy a nearby property for their children to live in during their university years.
That's what one Kleinburg couple did the year before their oldest daughter started her second year of studies at Wilfrid Laurier University in Waterloo.
"Over all, it was a very profitable experience,” they told the Globe and Mail. "We had enough rental income coming in to offset the monthly costs of the house, and at the same time we were building equity."
The decision to buy depends on the school's location, the cost of housing, the student's abilities to handle things, and the parents' feelings about what they too can manage, both financially and logistically.
Nonetheless, as long as a family saves money on the overall room-and-board package, buying a place can be a good strategy, some advisors say.
Of course, your child or their roommates may not stay there over the summer break, so you have to factor in a few months of vacancy.
"If you can pay what you would pay for campus housing toward buying a home, that's a pretty big win," advisor Rick Kahler told Financial Planning. "You build some equity in the investment, and if they're going to be at that school for four to eight years, that could go a long way toward building investment equity."
After a student graduates, parents can sell the property, rent it out again or hope that a younger child might choose to attend the same or a nearby school, he suggests.
Too optimistic? Have you housed your kids this way? How did things work out?
By Gordon Powers, MSN Money