Room, board at home

Many college students are choosing to live in second homes purchased by their parents instead of in the dorm. It can prove a sound real estate investment and cheaper than living on campus.

September 04, 2005|By Ryan Basen | Ryan Basen,SPECIAL TO THE SUN

Jenn Hubbs was in the middle of studying for a final in May when a toilet broke in the Portland, Ore., house she shares with four other Reed College students.

Rather than call a landlord for help, Hubbs tended to the problem herself. The Jessup native had little choice. As a co-owner of the five-bedroom house, the college junior was responsible for fixing anything that went wrong.

"I was tinkering with the toilet, and then studying, then tinkering with the toilet some more," the 20-year-old Hubbs said.

An occasional broken appliance aside, Hubbs enjoys being a homeowner. She's part of a trend where more American college and graduate students are living in homes purchased by their parents. The students often co-own the houses, living there instead of dormitories or off-campus apartments.

It's another consequence of the bustling real estate market, experts said. And although buying a home for a student is risky because of the temporary and slovenly nature of college life, it also can yield financial and personal benefits.

About 169,000 parents bought second homes for their children enrolled in higher education institutions to live in last year, according to the National Association of Realtors. Figures for previous years are not available, but the number of such purchases has grown along with the market since 2002, said Walter Molony, a spokesman for the Realtors' group.

This trend has extended to areas around several schools popular with Baltimore-area students, such as West Virginia University, Pennsylvania State University, Ohio State University and the University of Maryland, College Park. It has occurred in Baltimore as well, real estate experts said.

Parents buy homes to launch an investment, save on living costs for students and provide their children a better living situation.

But buying comes with risks and hassles. Parents must research the area they plan to buy in, gamble that the market will continue to produce profits for short-term owners and trust their offspring and other students to take care of the place - or fix things themselves.

There also are zoning regulations that limit the number of unrelated people who may live in a home. For example, in Baltimore County, no more than three unrelated people may live together in a single-family dwelling. In Prince George's County, the maximum number is five.

Lynne Champitto understood the risks involved when she co-signed the deed of the Portland house with Hubbs, her daughter. She studied the area, met her daughter's potential roommates and trusted that Hubbs was mature enough to handle homeowner responsibilities. Only then, in April 2004, did she make the down payment on the $188,000 house.

Hubbs is the on-site landlord and makes $700 monthly mortgage payments, collecting rent from each of her roommates.

"She's really taking care of all the day-to-day care," said Champitto, a computer scientist from Jessup. "It's turned out to be a really good experience that way."

Karyn Keating-Volke hopes her daughter, April Volke, has a similar experience.

The Arnold Realtor purchased a four-bedroom house with a converted apartment in the basement for her daughter in College Park in June. Volke, 19, a sophomore at Maryland, interviewed prospective tenants, set rental prices and handled other issues in time for the beginning of the school year on Wednesday.

Volke found three roommates to live with her in the house. Three other students live in the basement apartment, which has its own entrance. Keating-Volke said the house complies with zoning laws because it is considered two separate dwellings.

Volke knows only two of her tenants well. Because she is responsible for collecting the rent to make $3,000 monthly mortgage payments, she was nervous before moving in.

Preparing for this situation "has been pretty stressful," Volke said. "But it's a good experience. ... We've been learning a lot of things, like how to fix up the house.

"It's cool, but it's also taken up a lot of my time."

Keating-Volke acknowledged that owning is "a little more hassle in your life," than renting, but "the upside is my daughter is in the house - my third eye is there, to some extent. And I'm nearby."

She'll save money, she said, because her daughter's share of the rent is less than she would have paid to live on campus. She also hopes to earn a profit when she sells the house, which might be several years from now. Her youngest daughter is on schedule to start college when Volke graduates, and might go to Maryland.

Even if she doesn't, her mother might still turn a profit by holding on to the house for a few more years and renting it to other students. That's not a bad strategy, experts said.

"In a college town, you always know there's going to be a new group of people coming in," said Susan Jennings-Lantz, president of West Virginia University's Mountaineer Parents Club.

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