picture from http://childrenshospitalblog.org/a-differnt-home-for-the-holidays/ thank you!
Although we are college students, we most likely will not be living on campus for all four years and hopefully won’t be in college for more than that. I am currently living on campus in the dorms, but I have done a lot of research on places to stay off campus and have watched my brother go through the same process. So, the places that we are going to have to live are in apartments or a room in someone else’s house. The thing that the apartments and a room in house have in common is rent. Rent is a very good thing for college students because it gives us the freedom to be flexible and have the ability of move when we finish school or need to move closer to a new job or internship. The housing market is very important of the price of rent and how many people you need to live with.
According to Merril Lynch, a very big wealth management firm, the price of housing is going up as a result of low inventory. http://insights.wm.ml.com/articles/housings-surprising-strength.html?cm_mmc=ML-Webcast-_-Google-PS-_-the%20housing%20market-_-Housing%20Strength%20-%20Exact%20Housing%20Market%20-%20Exact
That low inventory raises prices because there are many people demanding homes because over 40% of people believe that home prices are going to be going up. So, low supply and high demand creates a shortage in the market and the price increases. A factor that keeps the supply low is that people do not want to sell their homes in expectation that prices will continue to increase, and that some home owners are still under water and their home is still worth less then when they bought it.
Now how does that affect us? Since we are college students, we most likely can’t live on campus forever, so we have to rent. Housing prices are going up; therefore, renting prices are going up and then we have to pay more. We do not have our parents paying for everything anymore, so were are now on a very strict budget. A very efficient and reasonable why to spend less money on rent and possibly live in a better location is to have roommates. There are costs and benefits to having roommates while renting.
– Rent is cheaper
– More people for maintenance (cleaning the bathroom)
– You won’t be as lonely
– Less personal space
– Deal with other people are their problems
You can figure out what you want to do regarding rent by using marginal analysis, like above. I am going to have roommates so that I don’t spend all of my income which is nothing right now, paying for rent, but do whatever works for you and is the most efficient.
Time for a Question!!!
- Do you had any experiences or advice that can help us make the right decisions when renting?
Please comment and have a nice week!