Which would you choose: an empty white dorm room with a bunch of rules for $14,000 a year, or an old five-bedroom mansion off-campus for $200 a month? In the most depressed housing markets, that's an option.
College grads across the country are “occupying” Wall Street, but some kids still in college are occupying mansions. As in, living there – not squatting. And they aren’t Ivy Leaguers, either.
While the grads frustrated with student loan debt and unemployment are camping out in parks across the country to represent “the 99 percent,” the kids more worried about a good GPA than a good IRA have been living like the other 1 percent. They’re renting huge family homes near campus.
A New York Times story says some students in foreclosure-heavy suburban markets are getting a steal on renting out five-bedroom homes with “three-car garages, wall-to-wall carpeting, whirlpool baths, granite kitchen countertops, walk-in closets and inviting gas fireplaces.”
Click over and look at the photo of the sophomore doing homework on his laptop in the Jacuzzi. They say this is an opportunity “for thousands of college students.”
Meanwhile, NPR’s story “Educated and Jobless” has some sad numbers for the group just a few years older than these kids. It points out that student loan debt has surpassed credit card debt for the first time ever, with the average student owing $24,000. “Only 55 percent of people ages 16 to 29 have a job — the lowest percentage since World War II,” and a quarter of those in their mid-20s to 30s still live with their parents.
But while it might sound financially reckless to move into a mansion for college, it actually makes a lot of sense right now for some students – if they’re careful. In the Times’ example, renting a college dream house is cheaper than the on-campus dorms at the University of California at Merced by almost half – $13,720 on campus versus “roughly $7,000” off-campus.
And that’s before they split the rent four or five ways. While jealous neighbors struggling with their own mortgages might not like all the noise, “Five students paying $200 a month each trump families who cannot afford more than $800 a month.”
There are some risks, though. Neighborhoods with vacant homes are more likely to attract thieves and squatters. And what if the landlord is going through foreclosure – would a tenant even be notified? Where do they send the rent? Who handles repairs? As legal help site Nolo explains, the bank might start claiming the rent, while the landlord is still responsible for repairs they can no longer afford.
“Unless there’s a specific local or state law to the contrary, the lender’s right to receive rent money doesn’t turn that lender into the landlord for purposes of maintaining the property,” they say. That could be a rough situation, especially in an older home more likely to need repairs and tender care that college kids aren’t likely to give.
There’s also the problem of finding enough reliable roommates to pay without causing trouble. A site like PayDivvy can help ensure everyone pays their fair share, but there’s no magic button for other problems, and no oversight from dorm residence assistants and campus security.
As the Times story also mentions, students living in these mansions also instantly become the cool kids everyone wants to hang out with – which can be a distraction from studying for a field where there are likely to be jobs in a few years and getting internships. If time flies while you’re having fun, that probably goes double for kids with the space and privacy to throw a party every weekend.
In other words, this arrangement can only really work for responsible students wise beyond their years. But for those lucky people, college is going to be especially awesome. And hey, who says they get all the fun? Maybe some Occupy Wall Street protesters could start occupying vacant mansions too – if that’s not too off-message.