SAN FRANCISCO—Wouldn’t it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers’ questions.

Have a question for Ms. Real Estate? Click here, and it may appear in a future column.

Dear Ms. Real Estate:

I am a dad whose son has applied to three colleges: The University of Washington in Seattle, Arizona State University in Tempe, and the University of Michigan in Ann Arbor. But he has not yet made up his mind as to which he will choose to attend. He is a very good student and is likely to be accepted by all three. My question is, should I be considering buying a condo at the school of his choice in order for him to have some say as to where he will live during his upper grades and perhaps grad school years, and more importantly, to have the choice of roommates if the condo is a multi-bedroom unit?

—Considering the Collegiate Condo


Dear Collegiate Condo:

You fit today’s parental stereotype by going the extra mile in order to protect your progeny from all possible unpleasant situations, such as unbearable roommates. And I further assume you have the wherewithal to make such a purchase. So the question is not if, but under what circumstances should you do so.

I’m sure you are aware that almost all colleges require freshman students to live in on-site dorms. This gives you a year to shop for an appropriate dwelling and location with your son after he is enrolled. For reasons that I’ll touch on below, most of which you have probably thought of, achieving your primary goal of assuring your son enjoys his college housing experiences will make it extremely unlikely that your investment housing for his student years will be financially rewarding; but the cost of achieving your goals are likely to be higher near some of the schools than others.

You will want to purchase a 2- to 3-bedroom unit with at least two baths to give the students the room they need to be comfortable. But charging the going rent to your son’s roommates is likely to conflict with your goal of maximizing the compatibility of his roommates. It’s unlikely that all of the friends your son chooses to live with during his student days will be able and willing to pay full market rate rents. You also cannot count on the time your son graduates from undergraduate school being the best time to liquidate your investment, and the same is true if he does graduate work at the same institution. On the other hand, depending upon how responsible your son is, having him live on the premises and manage the property may reduce the costs of managing and re-leasing the unit as roommates leave.

You should talk to your son and get a clear understanding of what role he will play in maintaining the unit and keeping rent-paying roommates. If he can’t or won’t take management responsibilities, including obtaining routine repairs for the unit, you’ll have to pay someone to take care of such management unless you live within driving time of his chosen university. Obtaining local management for one dwelling is likely to be expensive.

While the factors summarized above are likely to apply to all three of the schools he is considering, Ms. Real Estate thinks the chances for cost-minimizing rental income and price appreciation upon sale are likely in the “student housing markets” of the three schools.

Seattle is a good investment, because the University continues to expand, as well as the fact that major business enterprises like Microsoft and Amazon are located in the area. Further, Seattle has more than one cool area that serves as a magnet to young people. I’m presuming you will still be able to obtain a low cost loan in 2015. I would advise, if at all possible, a larger, 3-bedroom unit irrespective of college and location, since it provides the option of having a minimum of two renters in addition to your son. If one or more roommates decide to double up, even more potential renters.

The University of Michigan continues to expand its facilities and higher end auto-related companies, and R&D firms are now locating in Ann Arbor as well. But it is well to consider the fact that Ann Arbor contains a large, older housing stock which has put a damper on rents. So you may want to consider taking advantage of the low rents, unless you should find a well-priced, right-sized residence whose location appeals to your son.

Tempe, Arizona is another story. Arizona State University continues to grow prodigiously and currently has about 74,000 students on their three campuses, with the primary campus located in Tempe. Companies have also been moving to Tempe in recent years, so that housing supply has not been keeping up with demand. Currently, however, Tempe is going through a building boom and therefore may be experiencing a minor housing bubble. Currently, off campus high rise multi-family housing is relatively expensive, but you will want to look into the market over the coming years should your son decide to attend ASU. It is also important to point out that some of the on-campus housing, like the recently built HUB, has such a high level of amenities your son may prefer to reside on campus when he is an upper classman. For example, the HUB provides a swimming pool which includes an island and “layout” pool with chairs submerged in water, private cabanas with TVs and 22-foot LED video, etc. And the top floor has eight penthouses with views and individual hot tubs.

In Ms. Real Estate’s college days, the above could not have been imagined, even after an all night party.

The bottom line is your best bet is to wait until after your son has been enrolled for at least six months. What if he decides he doesn’t like his pick and wants to switch colleges – or God forbid, drops out? Both of you will know far more about how and where he would like to spend his upper class years after he has an opportunity to settle in. In the meantime, if he complains to you how much he dislikes his freshmen dorm roommates, you may want to suggest that he learn to live with it.