Parents are Buying Homes for University of Alabama College Kids Instead of Paying Room and Board

In recent years, a growing trend has emerged among parents who are choosing to purchase homes in college towns rather than simply paying for their children’s room and board. This approach not only provides a rent-free living situation for their kids but can also offer significant financial benefits, including potential profits from property appreciation. The University of Alabama and other institutions across Alabama and the state (often abbreviated as 'Ala' in local contexts) reflect this shift, as families seek to improve their children’s college experience while making smart real estate investments. The University of Alabama is also renowned for its athletics programs, which play a major role in student life and contribute to the university's strong reputation.

Parents are purchasing a home in college towns so their children can live rent-free, and sometimes they even make a significant profit. Instead of continuing to pay for traditional dormitory housing or renting off-campus apartments, many parents are opting to buy homes for their college-bound children. Parents can choose from a variety of housing options, making it important to carefully consider which best meets their family's needs and long-term goals. This strategy offers both a stable home environment and an opportunity to build equity. For example, Candice St. Pierre, a mother whose daughter attends Savannah College of Art & Design, decided to purchase a home rather than pay for expensive dorms and meal plans. She found dormitories to be costly, and after two years of renting off-campus apartments—dealing with co-signing leases and unexpected fees—she took control by buying a four-bedroom Victorian home in Midtown Savannah.

By converting a living room into an additional bedroom, she rented out the rooms to other students, covering her mortgage almost entirely. This arrangement allowed her daughter to live rent-free while St. Pierre managed the property as an investment. She believes this approach not only benefits her daughter but also has the potential to yield a profit when she decides to sell the house. Be sure to look into the details of property management and rental agreements before making a decision.

However, managing a property for college students is not without challenges. “Occasionally, you get those late-night calls,” St. Pierre noted, highlighting the realities of serving as a landlord for young tenants. Despite these hurdles, many parents find the experience worthwhile, especially when compared to the high costs of room and board.

Buying a home for your university kid can be a lucrative side hustle for some parents

The rising costs of tuition, housing, and meal plans have motivated entrepreneurial parents to explore real estate as a side hustle. By purchasing homes in college towns, they can rent out rooms to their children’s friends or other students, offsetting mortgage payments and potentially generating income. For many, even breaking even on housing costs is considered a success. Parents should learn about the local real estate market and the responsibilities of being a landlord before making a decision.

A study by Mortgage Research Network analyzing 121 colleges found that buying a home was more cost-effective than paying for room and board in 23 markets, many located in small cities or rural areas across the Southern United States. For instance, parents with children attending Temple University in Philadelphia could save nearly $30,000 over three years by owning a home instead of paying room and board fees exceeding $50,000. It is important to note that some properties may have additional requirements or restrictions that parents should be aware of.

Nevertheless, being a landlord to college students requires commitment and readiness to address unexpected issues promptly. St. Pierre advises that those new to real estate should approach this path cautiously, as it demands time and effort to manage tenants and property concerns effectively.

Similarly, LeAnne Carswell from South Carolina chose to buy a townhome near Clemson University for her son rather than pay $12,000 annually for an apartment. By paying cash and renting rooms to her son’s roommates, she eliminated mortgage costs and expects to break even or profit when she sells. Carswell emphasizes that this option was preferable to losing thousands of dollars in rent each year.

Prospective parent-investors should ask questions of real estate professionals and university housing offices to ensure they have all the necessary information before proceeding.

Betting on a Alabama college town can pay off

Investing in college towns not only benefits families by providing housing options but also serves as a promising avenue for real estate appreciation. Karen Yould, from Newport Beach, California, purchased a two-bedroom home in Missoula, Montana, for her son attending law school. Although she initially aimed to reduce his housing expenses, she was pleasantly surprised by the property’s value nearly doubling over four years. She sold the house for $415,000, earning close to $200,000 in profit.

Yould believes that college towns offer vibrant and lasting investment opportunities. The demand for housing in these areas remains strong due to the constant influx of students, faculty, and staff associated with universities like the University of Alabama at Birmingham (UAB), Samford University, and others throughout Alabama and the broader state. These institutions contribute to the local economy and create a steady need for rental properties and homes.

For parents considering this path, it is important to gather detailed information about the local real estate market, university housing policies, and community services. Parents should visit the campus in person, request information from university housing offices, and explore options on platforms like YouTube to make informed decisions. University websites often provide valuable content and may use cookies to serve personalized information and targeted advertising to prospective students and parents; users may need to accept cookies to access certain features. Meeting people in the university community, such as current students, faculty, and staff, is also essential to get a true sense of campus life. Many universities, including the University of Alabama, host welcome events and move-in days in September, providing an excellent opportunity for families to experience campus life firsthand. Additionally, understanding the terms of leases, the potential for rental income, and the responsibilities of property management are essential to successfully serving as a landlord.

In conclusion, as college costs continue to rise, parents are increasingly looking for ways to support their children financially while securing a comfortable home environment. Buying a home in a college town like Birmingham, AL, or elsewhere in Alabama can deliver both immediate housing benefits and long-term financial rewards. This approach reflects a commitment to excellence in education and family support, allowing students to focus on learning and personal growth without the constant worry of housing expenses.

How Homepoint Can Help

Homepoint offers a streamlined and supportive buying model that makes purchasing a home for your university-bound child easier and more advantageous. With Homepoint, parents gain access to expert guidance throughout the homebuying process, from finding the right property near the University of Alabama or other Alabama colleges to securing competitive financing options tailored to their needs. Our model emphasizes transparency, efficiency, and personalized service, helping parents navigate the complexities of real estate investment without unnecessary stress.

Moreover, Homepoint's approach allows families to pause and plan carefully, ensuring that the home purchase aligns with their long-term financial goals and the unique demands of college living. Whether you're a first-time buyer or experienced investor, Homepoint is committed to delivering support and solutions that matter. By choosing Homepoint, parents can confidently invest in a property that not only serves as a comfortable home for their student but also as a valuable asset for the future. Contact Homepoint today to learn more about how we can help you make the most of this smart investment opportunity.