While owning a home for their ag school daughter has the Rowinskys feeling sky high, Rohit Chopra, former Consumer Financial Protection Bureau student loan ombudsman, said there are some factors that could bring enthusiasm about the idea down to earth.
Roughly a third of college students will transfer to another school to complete their studies, Chopra noted.
“Transferring can throw a big wrench into your real estate investment plan,” he said.
Owning can also interfere with the career prospects of graduate students who discover the best or only jobs available are elsewhere, added Chopra, now a senior fellow at the Consumer Federation of America.
That's on top of the downside responsibilities and dangers that come with being a landlord, including repairs, property taxes, insurance and, if roommates are involved, the possibility that they might stop or get behind in paying rent.
As for the benefits, a little appreciated advantage of buying is that it can prevent students from having the added stress of looking for a new apartment during finals, said Kelly Moye, a realtor for 26 years in Boulder, Colo., which is home to the University of Colorado.
One of the main reasons college parents in Boulder buy is to help their college-age kids establish good credit, she said.
Credit agencies reward college students with high marks when they are cosigners on a mortgage the parents are dutifully paying, she said.
But Chopra said the reverse can be true, too. If for any reason, such as unemployment or illness, the parents can’t make the mortgage payments, the ability of the children to get credit at reasonable rates---or to obtain loans period--can be impaired.
The potential for good and bad credit impacts doesn’t apply to rental agreements cosigned by parents and students since lease payment histories are rarely reported to credit agencies.