Is your child heading off to UNCW next year? Have you looked into room and board? Now is the time to consider the costs of living. In addition, to the number of months in advance you will need to reserve boarding, you will need a few weeks to research what will work best for your child (and your pocket!). Ask yourself:
Will they be living on campus?
How much is UNCW room and board?
Would living off-campus be cheaper?
Would a roommate help off-set those costs?
Would a dorm, apartment, or private house be a better study environment?
Are they mature enough to handle living off-campus away from residential advisors?
If you have some money saved up, you may find that a real estate investment is the most cost effective choice in the long run. With interest rates and prices remaining low, many people are realizing that it’s cheaper to own than rent. But how do you figure out if it’s feasible for you? A lot depends on your own financials and credit score, and the maturity level of your child. But, let us run some numbers…
Room and board alone at UNCW is $8,338 for the traditional school months. If your child goes to school during Fall and Spring (10 months), that would total $833.80 per month. If you make a calculated purchase of property near UNCW, you could pay less than what it would cost to live on campus.
For example, let’s say you find a townhome near the college that costs $100,000. You would make a down payment of at least $10,000. If you finance the remaining $90,000 at an interest rate of 5 percent over 30 years, your principal interest payment will be about $587.31 a month. Toss in taxes and supplemental insurance (insurance costs depend on if there is a master policy for the all the units), and you will be looking at around $942.23 a month. Find two responsible roommates, and the cost for your child dips to $314.08 per month.
Keep in mind that these numbers do not contain transportation costs, utilities, or the luxuries (cable, internet, etc.). That would need to be factored in too, but would depend on the unit’s location and the individuals living there. Remember, not only is Wilmington a college town, but a beach town as well. Chances are your child will want to be in the area for the warmer months. Owning a home in Wilmington means they don’t have to pay to move around if they choose to take the summer off.
After your child is done with school, if they choose to move on, you can either rent out the home or sell it. Investment properties are usually the most stable in college towns (the closer to campus the better). So, there is plenty of opportunity to make money off of a property, especially with prices forecasted to rise over the next five years.
If you’d like some help determining if purchasing an investment property for your child is feasible, give us a call at 910.202.2546. We can look into potential properties, run some numbers, and connect you with a reliable lender.