Off-campus housing as investment on the rise

It doesn't take a master's degree to understand the limited housing options available at universities. As the cost of renting college dorms and apartments increases, families are considering buying property their college bound children can live in while at school. The result can better housing for the college student, a reduction in overall expenses and an investment for the parents.

"Investing in off-campus housing appeals to parents, because they can avoid the high rental rates in college towns and enjoy some great tax benefits," said Jim McEneaney, senior regional vice president for Coldwell Banker Residential Brokerage. "Plus, it provides students with a jump start on the responsibilities of homeownership and can be a benefit long after graduation."

Before your son or daughter heads back to school, consider these pointers:

Tuition costs, A second home in a college town allows your college student to claim residency, switching from out-of-state tuition rates to in-state, which could save thousands of dollars over four or five years.

Local appreciation. Research the town and make sure the properties are appreciating. A college town can be less vulnerable to price declines than other areas, but a local real estate professional can give you a clearer understanding of the rental demand and home values around the campus.

Additional income. A home with several bedrooms presents opportunities for rental income. Plus, the property can be retained as a rental after graduation, provide housing for siblings who may attend the same school, or even offer a home base for the family to attend sporting events.