A couple spending $300-500 per month on rent for three years will spend between $10,800 -— $18,000 on rent alone.
For most, money in college is tight. It’s hard to think big when one’s bank account is running on empty. Even so, many newlywed students don’t realize that renting is not the only option available to them.
Jonathan and Donna Randall, seniors from Rigby, Idaho and Brockport, N.Y., have been living in married housing for two years. Earlier this week, they made the long-awaited upgrade to home ownership.
“We thought, instead of throwing away $450 a month, why not build equity?” Jonathan said.
He and his wife think of their new home as a long-term investment that will pay off in the future.
“After you graduate here and you want to move, you have something to show for that money you put down, whereas when you rent and you move, you have nothing to show for your time there,” Jonathan said.
To many, the payoff of building credit through mortgage payments and building equity through home ownership is an invaluable and exciting prospect.
“If you [work on building credit], you’ve already started on your way up, and you can take [it] with you wherever you go,” Jonathan said.
Investing in a house, townhouse or even a trailer has many obvious, non-financial benefits.
Drostan Baker, a senior from Idaho Falls, and his wife, Stacey, have been living in a townhouse for about 14 months.
“We’ve enjoyed having a bit of extra space,” Baker said. “We have neighbors, but it’s quieter than in an apartment because you don’t have someone living above you.”
Baker pointed out that the advantages include a lot more privacy, storage and much more liberty as far as decorating is concerned.
The Randalls agree. “We didn’t want to hear all of the people that [would] live around us [in an apartment]. With your own place, you can vacuum at 11 p.m. and no one will care,” Donna said. “It’s a chance for us to have a yard. We’ll use our own labor over time to build equity by landscaping and decorating. This will up the value of our house.”
There is a price to pay for the extra space, however.
“Utilities are quite a bit higher,” Baker said. “Also, we have to pay for DSL and cable if we want that.”
Other expenses can include water, city garbage and extra insurance.
Whether the motive is to build equity or simply to gain some newfound privacy, the issue of timing is crucial.
“There is a huge advantage to buying your first house in Idaho. To buy a house is so much cheaper here than in other places,” Donna said. “The timing is good because real estate in Southeastern Idaho is growing and it’s to the point where there’s great potential. If you purchase now in say, five years, you’ll have ridden the market.”
Having learned from their experience, the Randalls emphasized the importance of doing one’s homework, of sticking to a strict budget in the face of persuasive real-estate brokers and of purchasing a home that will retain or increase in value.
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