If any of you parents have ever said, “Sure, I’d love to buy a property in Oxford sometime.” Well, now might be the perfect time.
When sending your student(s) off to Ole Miss, rent can be burdensome over the course of 4+ years. And if a sibling is along the way, you'll have to double that! But have you ever stopped to consider the financial benefits of buying over renting? The truth is, you can actually pay for your college student's “rent” AND get some help paying for an investment property by renting out other bedrooms. $500/bedroom per month is the average rental rate in Oxford. Therefore, if your child takes up one room and you rent the other rooms to their roommates, you’ve made your money back and then some. In addition, you can take into consideration the inflation and price per square foot over the course of said 4 years.
For example, there is a 3 bedroom, priced at $209,000. Let’s say you get it for $200,000. A 30-year mortgage with 10% down at a rate of 3.75% will cost you about $833 per month. So, you charge $500 to each of the other two renters, and now you’ve broken even with your mortgage, insurance and taxes. Then, you can turn around and sell it in 4 years for a profit! Or better yet, hold onto the property and continue to rent it out. Boom - cash cow!
So now that I’ve sold you on buying versus renting, because after all, it's a no brainer...consider the competition of your “rental.” Students nowadays are used to good locations and great amenities. It's definitely something to consider when looking for a property to purchase. The older small houses around downtown Oxford are more often sitting vacant because their age and lack of amenities. So there is the chance to get a good deal and update a property like that - OR, purchase a move-in ready house or condo in another part of Oxford. Let's be honest - there are no bad areas here!
When a great investment property pops up, its time to jump on it! The truth is, your students has 2 or 3 friends wanting an “in” on a place to live - so why not take advantage of that and make a little profit, as well. Happy house hunting! Hotty Toddy!