The Pros and Cons of Renting or Purchasing Living Accommodations, or Staying in Residence

Off to College!

Going to a post-secondary school or receiving an opportunity to attend a university or college is a privilege. It is a time for students to explore who they are and what they want to do with their lives. 

It is a time filled with fun and adventure, it is also a period of self-discovery and personal growth. Post-secondary institutions help individuals develop their current skill sets and create new ones. Before attending college or university, students encounter many questions about their accommodation, their educational path, and the affordability of food and living expenses.

In this article, future or current post-secondary students will find information on renting or purchasing a home versus staying on campus in residence. 

Renting a Home – Off-Campus Living

When it comes to lifestyle while attending a post-secondary institution, participating in the various events and amenities available is important to having a rich student experience. 

This may include nighttime entertainment, sports, games or athletics, or various other clubs.  Most students would be happy to stay somewhere that is not their parents’ basement.

In most cases, students would like to live close to the school, have their own space to create their own rules, and be responsible for the same things an adult would be. Renting a place can be an economically wise option for students who do not have a career set up. 

If they have been waiting tables, working retail, or some entry-level job, they will most likely not have the funds to purchase their own home and start a mortgage. Students who read this article may inquire about the positives and negatives of renting a living space.

The pros of renting a living space off-campus

1. An all- in-one payment that can include utility expenses (Note that this is not always available, but depends on the landlord):
   1. Internet (Sometimes)
   2. Water
   3. Electricity
   4. Gas
   5. Cable TV (Sometimes)

2. When something breaks or an appliance needs repairs or to be replaced, the liability is on the landlord, not the renter;

3. Some condo corporations offer housing at student rates, making it more affordable than regular rentals;

4. Property Taxes and other government fees are liable to the landlord, not the renter.

The cons of renting a living space off-campus

1. There is always a possibility that a tenant can be kicked out and revoked their rental agreement
   1. Students can be loud, and intoxicated and cause a ruckus
   2. They can miss a payment, and forget different points of the contract

2. Depending on how long the lease is, students may have to move to another location and incur moving expenses

3. Tenants cannot treat their rental as an investment to potentially generate additional income

Purchasing a Home – Off-Campus Living

A funny thing with university or college students is that age doesn’t matter. The majority of students who attend these places are 18 and above. Other students can be in their 30s or 40s and going back for their masters or doctorate. 

A person who is further in their career and has built credit and income has the option to invest in real estate close to their post-secondary institution.

Most 18 to 22-year-olds will not have this option as they are just starting out and building their career. However, their parents might be in a position to invest in student housing.  

Now some people may be thinking, with online education, communication software, and other technology, why would I want to invest in real estate close to a university or college? 

Here are the pros and cons of purchasing a home off campus. 

The pros of purchasing a home off-campus

1. Investors can create a space for younger students to live and study
2. Earn rental income
3. Build appreciation in the real estate
4. The investor can keep and use the property after they complete their studies
5. Ownership of real property (Leverage, demonstrates strong credit)

The cons of purchasing a home off-campus

1. Property Taxes
2. Expenses and Liabilities from the investment in real estate
3. Trusting the house to people who may not respect it
4. Long-term commitment – it is not as easy to exit an investment as it is to exit a lease

Investing in Residence – On-Campus Living

The previous two options for living space were off campus by either purchasing or renting a home. If students want to have a more memorable and involved experience, they may decide to invest in on-campus housing known as residence. 

Depending on the size of the campus, each university will carry housing for students in either dorms, apartments, or shared rooms. By living on campus, students will be close to their classes, have the opportunity to meet other students who attend the same school, and in most cases, have free access to public transportation. 

They also have the option to bring their vehicle and pay for parking to keep their car on campus grounds. 

Here are the pros and cons of investing in on-campus housing. 

The pros of investing in residence

1. Proximity to lectures and seminars of the students’ respectable major
2. An enhanced social environment
   1. Students have the opportunity to meet other students that attend the same school and campus
3. (Often) Free public transportation
4. Access to school cafeterias and meal plans

The cons of investing in residence

1. Space
   1. Most dorms are cramped and a student may get homesick because of this
2. Cost
   1. Residence is not cost-friendly, and students will have to pay the price to live there.  For instance, there is usually no option to cook in your room.
3. Distance
   1. Depending on location and where the school is located, a student may feel uncomfortable with how far they are living from the home they grew up in

What Now?

Three options have been provided for student living accommodations and viewers who read this may still question each of their pros and cons. One way to assess each option is to create a budget and account for their respectable income and expenses.

Questions you ask yourself could include, but are not limited to: What do I need to make to cover a full year’s rent? How much does my campus residence cost and can I afford this with the additional tuition fees? 

All these questions include some form of accounting and luckily for you, the professionals who wrote this article work at an accounting firm. 

KATA Accounting is here to assist you with your accounting questions and can create a guide to help you determine the best option for your needs. Give us an email! Give us a call! Share with us what you are looking for in terms of living arrangements.