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new study by Redfin has concluded it is more cost-effective for students at some public colleges to buy their own condo rather than rent an on-campus dorm room.
According to Redfin, dorm rents range from $232 to $1,817 per month, with a median monthly rate of $705. Redfin compared the monthly dorm rate at 195 public colleges with the median monthly mortgage on a condo in each of those cities and found 47 locations where owning was a better financial option than renting.
The top five public colleges where condo ownership was recommended were the University of Arizona in Tucson (where the monthly mortgage averages $545 and the monthly dorm rent averages $811), Georgia State University (where the monthly mortgage averages $1,116 and the monthly dorm rent is $1,139), the University of South Carolina (where the monthly mortgage averages $511 and the monthly rent averages $671), Kent State University (where the monthly mortgage averages $664 and the monthly rent averages $751) and Louisiana State University (where the monthly mortgage averages $731 and the monthly rent averages $837). Not surprisingly, these schools are based in metro areas where median home prices were below the national average.
Redfin real estate broker Misty Hurley noted that this solution could ultimately benefit students in their post-college lives.
“Homeownership can be a great way to build wealth,” said Hurley. “Students will build equity that they can one day use as a down payment on a move-up home or to pay off student loans. If they choose not to sell right away, they’ll have a piece of property that’s ripe for renting, as there are always new college students looking for rentals.”
