College economics 101: Buy vs. rent
I am apparently not the only one who sees potential advantages to buying a place for a son or daughter going off to college.
Zillow has published a nice list of dozens of college towns that compares buying versus renting in those markets and shows the estimated “breakeven horizon” — how long before buying pays for itself compared to renting.
As I suggested here a few weeks ago, anyone sending a child to college should at least consider the possibility of buying a house or condo rather than renting during college years. With interest rates relatively low and the Zillow Home Value Index Forecast showing home values rising in many markets, the math may just pencil out for you.
Zillow’s post “College Towns: Buy vs. Rent” shows, for example, that the median breakeven point is 3.7 years in Boulder, Colo., 3.6 in Columbia, Mo, and 1.5 years in Tempe, Ariz., where my daughter graduated recently. In a few big California college towns: 1.9 years in Berkeley, 3.6 in Chico, 1.5 in Fullerton, 1.8 in Pasadena, and a less-financially-appealing 4.8 in Davis. The Zillow report allows you to sort the data by state, so you can easily find the college town that interests you.
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