For many college students, housing costs represent a significant financial burden. However, a growing trend suggests that buying a home near campus, rather than renting or relying on dorms, can be a financially savvy move. A recent analysis of 121 college towns reveals specific markets where homeownership not only saves money but also generates long-term passive income. This strategy works best in areas where room and board costs are high relative to home prices, and where property values are expected to appreciate.
The Core Idea: The math is simple: in some locations, the total cost of owning a home over several years (including mortgage payments, taxes, and maintenance) is lower than the cumulative cost of room and board. Moreover, once the student graduates, the property can be rented out, creating a steady stream of income.
Here are five college towns where this strategy yields the most significant financial benefits:
Philadelphia, Pennsylvania (Temple University)
- Median Home Value: $234,799
- 3-Year Cost of Ownership: $21,162
- 3-Year Cost of Room & Board: $50,904
- 10-Year Profit: $73,030
In Philadelphia, buying near Temple University saves approximately $30,000 over three years compared to standard campus housing. Holding the property for a decade allows for an additional $70,000+ in profit, factoring in appreciation and potential rental income.
Huntington, West Virginia (Marshall University)
- Median Home Value: $137,909
- 3-Year Cost of Ownership: $19,751
- 3-Year Cost of Room & Board: $38,556
- 10-Year Profit: $33,690
For Marshall University students, homeownership is nearly $19,000 cheaper than room and board over three years. A ten-year hold projects nearly $34,000 in profit.
Newark, Delaware (University of Delaware)
- Median Home Value: $365,150
- 3-Year Cost of Ownership: $27,818
- 3-Year Cost of Room & Board: $44,514
- 10-Year Profit: $67,366
Purchasing near the University of Delaware saves around $17,000 in three years versus room and board. A decade-long investment can yield nearly $70,000 in profit.
Tuscaloosa, Alabama (University of Alabama)
- Median Home Value: $227,250
- 3-Year Cost of Ownership: $28,167
- 3-Year Cost of Room & Board: $44,520
- 10-Year Profit: $32,598
Homeownership near the University of Alabama costs about $16,000 less than room and board over three years. Owning the property for ten years can result in $32,000 in profit.
Memphis, Tennessee (University of Memphis)
- Median Home Value: $151,722
- 3-Year Cost of Ownership: $15,861
- 3-Year Cost of Room & Board: $31,032
- 10-Year Profit: $51,053
In Memphis, buying near the University of Memphis saves nearly $15,000 over three years compared to on-campus housing. A ten-year hold can generate over $51,000 in profit.
The Takeaway: While not applicable in every market, this strategy presents a viable path to financial savings and long-term income for students and their families. Careful consideration of local property values, rental rates, and appreciation potential is essential for maximizing returns
