Condos for the Kids
Many international buyers in the market for a second home in Boston are actually looking for a place for their kids to call home while they attend one of Boston’s universities for a few years. Here’s the reasoning: If a family must pay room and board for a child living at a university dormitory for four years, why not spend the money instead on a condo that will hopefully appreciate in value, (or at least hold its value). Room and board at area universities is approaching $12,000 a year. After four years, a parent would have spent $48,000 on this basic necessity. But some parents think it’s smarter to buy a small studio, one, or two-bedroom condo for their child (which the child can also share with a roommate to cut costs) and sell the whole thing in four or five years for a small profit. Developers are cashing in on this idea by constructing buildings directed specifically at this market. For instance, 461 Park Drive, in the Fenway features well-appointed studios ranging from 311 to 463 square feet. Prices range from $239,000 to $349,000. The building is located near Boston University and the Longwood Medical area, but is also not far from Northeastern University, the Museum School, the Art Institute of Boston and the Berklee School of Music.
Whether this is really a good idea depends a lot on an individual’s situation, but buyers should not forget that there ARE costs associated with buying and selling, and that there will be condo fees, property taxes and other maintenance costs associated with owning a property. After all these expenses are accounted for, savings may be pretty minimal, or there may be no savings at all. Also, with the dollar falling further each week in comparison to the Euro, one has to ask if parents might not be better off watching rent fall each month, rather than locking themselves into a certain price by buying. On the other hand, there IS a degree of flexibility in owning a property. For example, a family may decide to hold onto a property after a son or daughter’s graduation and rent the property out, or use it as a pied-d-terre for family vacations.
A note of caution for parents contemplating buying a property for a son or daughter: First, be sure your child is mature enough to handle the responsibility of being a good neighbor and homeowner. Unfortunately, many students living in their first apartment aren’t, and the neighbors end up paying. Second, think twice about buying into any building made up entirely of studios owned by students. The building is unlikely to be well-maintained, and the unit is less likely to increase in value. Let’s face it, a condo in such a building also won’t make a very nice second home, since a family in town for a quiet vacation may feel more like they’re living in a college dormitory. The best property for investment purposes is an established building in a good neighborhood, where you, yourself, would want to live. A building should have many owner-occupants, families and professionals. Such a property will make a better home for your child, and a better investment for you, as well as a potential second home.
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