From what I've read, there seems to be a few positives and negatives associated with this. The positives:
- If the housing market is doing well, the parents can recoup their investment if they decide to sell after their offspring graduates, and they will avoid paying housing costs as well.
- The students usually get a considerable break on rent.
- The condo is often much nicer than the traditional dorm room or roach-infested older college apartment. (As one of the students in the Madison article notes, "It's nicer than the house I grew up in."
- If the housing market slumps, the parents may have trouble unloading the condo after graduation, or they may take a loss on the deal.
- Other possible buyers may be turned off by a certain complex if the majority of its tenants are students.
- It may be difficult for parents to fix maintenance problems if the college town is far away from where they live (but, as others point out, this provides the opportunity for the student to get experience in evaluating and hiring repair professionals and so on.)
When I was in school, some student-centered condos near campus started to sprout up. I'm not sure whether or not they could exclusively sell them to students or not, but going for that angle at least served as a warning to other possible buyers that students would likely be in the majority there. We never went for that idea in my family (probably because my sister was about to start college herself at the time), but I knew a few people who did, and the places turned out to be pretty decent student housing.
So what do you think--good idea, or bad idea? If you're in college, would you go for an offer like this, and if you have kids, would you consider buying something like this for them?
Speaking of real estate...why are houses so much more expensive in, say, California than they are here in Dallas? Here are two views on the subject.