In Top College Football Towns, Buy or Rent?

Study outlines the towns where buying is cheaper than renting, and vice versa.

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Some parents chose to buy homes in the towns where they send their kids to college rather than pay rent for dorm rooms or off-campus apartments. A recent study by Cyberhomes explores the renting-vs.-buying dynamics in leading college football towns.

Cyberhomes ( www.cyberhomes.com) looked at 15 of the nation's top ranked football schools to see what the buy vs. rent market looked like in these specific areas. The data found that, of the 15 college towns, only three of them had a buy to rent ratio in favor of renting. The other 13 college towns showed that monthly payments for a single family home (mortgage plus taxes) was less than monthly rent for a SFH, suggesting that parents looking at longer term housing for their co-ed should opt to purchase the home—especially with the potential to make money back with charging rent to other roommates.

Of our selected college towns, the top-three where the ratio is highest in favor of BUYING a single family home (SFH):

University of Oklahoma—Oklahoma City, OK—SFH Payment $764, SFH Rent $1,088 (.70 Ratio of Monthly Single Family PAYMENT to Single Family RENT)

University of South Florida—Tampa-St. Petersburg-Clearwater, FL—SFH Payment $1,074, SFH Rent $1,506 (.71 Ratio of Monthly Single Family PAYMENT to Single Family RENT)

University of Kansas—Lawrence, KS—SFH Payment $1,074, SFH Rent $1,506 (.74 Ratio of Monthly Single Family PAYMENT to Single Family RENT)

Now, before you go rushing off to Tampa to buy that home for your college-age son, remember that this rent-vs.-buy monthly payment data is only one component that you should take into consideration. Another key consideration, of course, is home price trends.

Housing prices have already fallen steeply across the nation, and Chris Low, chief economist at FTN Financial, told me yesterday, "I don't think there is a housing analyst around who doesn't think that there is an at least 15 percent of downside still [to come]." In housing boom states, like Florida, it could be even worse. So think long and hard—and then think longer and harder—before you buy an investment property in Florida for the college student in your family to live in.

Still, the report is interesting. Check out the rental side:

Of our selected college towns, the top-three where the ratio is highest in favor of RENTING a single family home (SFH):

University of Southern California (USC)—Los Angeles County, CA—SFH Payment $3,163, SFH Rent $2,270 (1.39 Ratio of Monthly Single Family PAYMENT to Single Family RENT)

University of Oregon—Eugene-Springfield, OR—SFH Payment $1,384, SFH Rent $1,272 (1.09 Ratio of Monthly Single Family PAYMENT to Single Family RENT)

Fresno State—Fresno, CA—SFH Payment $1,432, SFH Rent $1,352 (1.06 Ratio of Monthly Single Family PAYMENT to Single Family RENT)