How Kiddie Condos Can Offer A Return On Investment For College Student Room And Board Expenses

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I almost wish I found this video sooner; not many colleges are going into session in October.  But... if you have college students in your family and want to increase your exposure to real estate, Barbara Corcoran has some interesting things to say.

Parents buying homes near college campuses is so prevalent now that mortgage lenders have given them a monikor -- "Kiddie Condos".  The loan is not a "typical" home loan but it comes with the same rates and terms.  It's a winning situation for everyone:

• Parents get cheaper housing options than offered by the school
• Students get experience managing property and tenants
• Students get mortgage payments to report on their credit report
• Parents get the option of keeping the property for future rental, or selling for a profit when the functional life of the home ends
• As your accountant will advise, mortgage interest tax deductions do apply

As housing grows scarce at some schools, Kiddie Condos are growing more common in Chicago at DePaul, University of Chicago, Loyola, and many of the city schools even though high housing costs can hinder the long-term return on investment can.

For college campuses in less expensive areas, though, the math can make terrific sense.  University of Cincinnati, Northern Illinois University and Xavier University come to mind.

The liability and responsibility of managing housing for college students is not for everyone, but it may be a better investment than paying a university-determined rate for Room and Board.  That's just paying rent.