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Although living in a campus dorm is often the norm for college students, room and board at four-year public universities averages about $12,302 per year, according to the Education Data Initiative. This means that owning a home can not only save you money, but also generate passive income.
121 College Towns Review by Mortgage Research Network 23 were identified where buying and holding assets for 10 years could yield profits.
For this strategy to be successful, analysts recommend looking at schools where room and board numbers are high and home prices are relatively low. They also recommend avoiding cities with expensive property taxes or slow appreciation and setting up the loan so the student is the primary borrower and can qualify for better owner-occupied rates.
Here are five college towns where long-term homeownership can help you save money and make gains.
Philadelphia, Pennsylvania (Temple University)
- Average home price: $234,799
- 3 year cost of ownership: $21,162
- 3 years cost of room and board: $50,904
- 10 year profit: $73,030
Owning a home near Temple University saves nearly $30,000 over three years compared to paying for room and board. Additionally, families who have owned a property for a decade may realize profits of more than $70,000. Benefit figures are based on the cost of room and board versus the expenses of owning a home, as well as home appreciation and rental income after the student graduates.
Huntington, West Virginia (Marshall University)
- Average home price: $137,909
- 3 year cost of ownership: $19,751
- 3 years cost of room and board: $38,556
- 10 year profit: $33,690
For Marshall University students, buying a home instead of paying for room and board reduces costs by about $19,000 over three years. Over 10 years, the estimated profit is closer to $34,000.
Newark, Delaware (University of Delaware)
- Average home price: $365,150
- 3 year cost of ownership: $27,818
- 3 years cost of room and board: $44,514
- 10 year profit: $67,366
Families who buy a home for their University of Delaware student can save nearly $17,000 over three years compared to the cost of room and boarding. Additionally, holding the property for 10 years could yield a profit of approximately $70,000.
Tuscaloosa, Alabama (University of Alabama)
- Average home price: $227,250
- 3 year cost of ownership: $28,167
- 3 years cost of room and board: $44,520
- 10 year profit: $32,598
Buying a home near the University of Alabama costs about $16,000 less than the cost of room and board over three years. Additionally, owning the property for a decade could yield a profit of $32,000.
Memphis, Tennessee (University of Memphis)
- Average home price: $151,722
- 3 year cost of ownership: $15,861
- 3 years cost of room and board: $31,032
- 10 year profit: $51,053
In Memphis, families can save more than $15,000 over three years by buying a home instead of paying for room and board at a local university. After 10 years of home ownership, the profit could be nearly $51,000.