In addition to current UT parents, there are others who also consider purchasing condos near UT campus.
Here are the top 5 reasons people buy condos near the campus at UT Austin:
Save Money On Rent
The most common living arrangement is two people sharing a 2 bedroom 2 bath condo or apartment. The monthly rents in these 2/2 condos and apartments within walking distance of UT range from $750 to $1200 per person!
These units require a 1 year lease. A student who stays in the dorm freshman year and rents for the next three years will be paying rent for 36 months. Total money spent on rent in that time period could be $27,000 or more.
Alternatively one could purchase a two bedroom condo for about $250,000. The purchasing student can stay in one of the bedrooms while having a roommate in the other bedroom paying about $800/mo for rent.
The monthly cost of owning a two bedroom condo is about $1290/mo. See costs detail:
- Monthly Interest On Loan - $690/mo
- HOA - Home Owners Association Fee - about $200/mo
- Monthly Amortized property Tax - $400/mo
- Monthly rent collection from roommate - $800/mo
- Income Tax Savings - $100 to $300/mo
Based on the above numbers, the total monthly out of pocket costs of owning are about $300 per month as compared to cost of renting at $750 to $1200 per month.*
*(other costs such as utilities will be the same whether you rent or own)
Over 3 years there is a savings of more than $16,000 for those that purchase a two bedroom condo instead of just renting a unit!
After graduation you may sell the unit and recoup your down payment and equity, make a profit on the sale, or keep the condo as a rental property.
Many people whether or not they attend UT are looking for monthly income streams that also appreciate in value over time.
What location has a constant demand for rentals and is increasing in value?
Oh...perhaps a college campus in an urban setting with 80% of the student body forced to find off campus housing due to a short supply of on campus housing options!
See University of Texas at Austin - enrollment and housing statistics - http://colleges.usnews.rankingsandreviews.com/best-colleges/university-of-texas-3658/student-life
Here is the average asset value of a 2 bedroom condo property near UT over the past 10 years:
Here is the rental rate (per bedroom) for 2 bedroom units near UT over the past 10 years:
The rental demand stays high for these purchased condos even with all of the new campus area rental unit construction going on. The rental price per bedroom for new construction is so high that paying a mere $800 per bed in rent at an older condo looks like a bargain in this area near UT.
People that bought a condo unit in 2006 for about $160,000 (now worth about $220,000) are getting around $1600 in rent in 2016. This asset provides great monthly cash flow while still appreciating in value over time.
Save On Out of State Tuition
If you are an out of state resident planning to attend the University of Texas, your tuition can be $10,000 more per semester than in state tuition. There are several ways for an out of state student to qualify for in state tuition and save $20,000 per year!
One of the most popular ways to get in state status is to own your primary residence in Texas as opposed to renting. After 12 consecutive months of owning your residence in Texas, you may become a Texas resident and save a significant amount on your annual tuition. For more details check with the University of Texas Admissions - 512.475.7399 https://admissions.utexas.edu/residency#fndtn-residency-establishing-domicile-requirements
Vacation or 2nd Home
Many now view Austin, TX as a vacation destination. In addition to the popular Longhorn home football games, there are other events such as the SXSW conferences and festivals, Austin City Limits music festival, Formula 1 Racing, the Texas Relays, the Hill Country and constant downtown nightlife. All of this activity brings scores of people to Austin every day. Instead of looking for a hotel and hoping there is availability, some decide to buy a place that they know will be available whenever they come to Austin.
For the diligent planners that know exactly when they will be in Austin well in advance of their stay, they can even arrange to rent out their unit to others in between trips.
For more details on gameday condos check out this Chicago Tribune article - http://articles.chicagotribune.com/2006-09-24/business/0609240262_1_condos-hotel-room-capstone-development-corp
As some enter the age of retirement, they want to scale down from their huge home in the suburbs. At the same time they don’t want to move to large ‘retirement communities’ and spend their day playing shuffle board. Many people heading into retirement are choosing to live near colleges and universities. These people are looking for a place that is
- low maintenance
- easily accessible to many services and events
- in an area that is energetic and full of youthful enthusiasm
Check out the US News & World Report - “Top 10 reasons to Retire in a College Town”http://money.usnews.com/money/retirement/articles/2012/04/16/10-reasons-to-retire-in-a-college-town
Look at your own goals and see if purchasing a condo near UT Austin is right for you. You may be in one or more of the situations above. If so, weigh your options. Whether to save money, make money, have additional convenience, or all of the above, a condo purchase near the University of Texas in Austin may be worth considering.