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If you have a kid going off to college, you may be interested in purchasing a place for them to live while they are in school- a "kiddie condo" as your local Realtors might call it. Someone asked me recently what I'd keep in mind if I were purchasing a condo for a college-age kid and here's what I came up with. Read on below for what I'd be looking for if a purchase like this were in my future.
Location: Obviously, this is an easy one- being within walking or bike riding distance makes a lot of sense and will help with future resale as well
Age of Unit: We just read an article this week that the price of having work done to your home has gone up 50% since 2020. This makes owning fixer uppers or homes you have to remodel much less appealing- especially considering you only get about 50-70% return on remodel projects. There are virtually no remodel projects that return more than 100% on money spent. If I were considering a condo purchase, I would be looking for something built after 1990 if at all possible and I’d be looking for a turn-key unit.
Less Yard/Less Upkeep: College kids and young renters are not going to keep a yard well. I’d focus on condo or townhomes with very limited yard space.
Health of the Homeowner's Association: This is very important- especially in Boulder where a lot of the condo and townhome buildings are getting older. Many of the HOAs there have been mis-managed and underfunded over the years and now are having to raise monthly HOA fees and enact special assessments on the units. One condo I sold in Boulder a year ago had raised their monthly fees from about 400 dollars a month to almost 700 dollars per month just in a few years. Ouch! Prospective buyers should read HOA docs carefully, look at past special assessments levied, read meeting minutes to check for upcoming projects, and check for a robust amount of reserves.
In-Unit Laundry/Garage/AC: I’d advise getting a unit with all three as this will make re-sale easier.
Stay Away from Road Noise and Railroad Tracks: This is a general recommendation we make to all clients- again, this is really important for enjoyment of the home and future resale.
Plan for renting to others?: Some investors focus on college renters and they really like it. The return can be good just like some other real estate investment strategies, you have a ready supply of renters, and many parents will co-sign on the leases. Downsides to this investment strategy are you have to be a bit more careful with the condition of the home when renting to college kids (we know investors who rent to college kids send out frequent reminders in the winter to unscrew hoses outside, don’t turn off heat when you go home for Christmas, etc.) I would anticipate a bit more maintenance cost with this strategy.
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