Many undergraduate students live on campus. However, many decide to start renting off-campus when they become upperclassmen. If you graduate and begin pursuing a higher level of education, you might need to think carefully about where you’re going to live. Is it better to buy or rent your housing as a grad student? The ins and outs of this decision can have a major bearing on a situation that will already cost you quite a bit.
The Pros of Owning a Home as a Graduate Student
Purchasing an apartment, condo or home can be a big investment, but it comes with its advantages. It might be worth considering especially if you plan to stick around after completing your education. You’ll likely be able to qualify for the mortgage interest deduction, which will help lower your income tax bill.
If you buy a house, you’ll also be able to enjoy being in a homey environment that reflects your own taste and style. You’ll have more control over your living situation and you could get roommates to help offset the cost of your mortgage.
If you’re worried about the financial risk that comes with buying a home, you can consider renting the space out during the summers or over other breaks. You can use your profits to cover your monthly mortgage payments and make small improvements to the home to boost your property value.
The Pros of Renting as a Graduate Student
Renting is a lot less risky than buying. You aren’t locked down if you rent and you can revisit the housing decision after your term is up. You can also choose to move if you need a change of scenery. Overall, you have less responsibility as well. If something breaks or goes wrong, you can call the landlord or property manager and have them resolve the issue.
Furthermore, rent payments are probably more affordable if your income is low or you’re not working at all. Buying a house requires you to pay for closing costs and make a down payment. You won’t have to sell your house when you finish grad school, or face constraints when it comes time to go on the job market.
How to Decide to Buy or Rent as a Grad Student
It’s important to remember that you might not stay in the area where you attended grad school forever. That means that your housing isn’t necessarily something you want to invest in long term. In reality, both renting and owning are big financial responsibilities if you already have student loans.
Buying a home might make sense for certain individuals, but you probably won’t be making a fortune at this time in your life and you might want to use your funds elsewhere. On the flip side, if you buy a house and sell it for a hefty profit later on, the benefits will be great.
No matter how you decide to meet your grad school housing needs, do what works for you. Evaluating your personal needs, budget, environment and future plans can help you make the appropriate decision. Consider whether or not you could receive financial aid from the government or your school for housing as well. Taking advantage of opportunities like this could pay off big time down the road.
Financial Planning Tips
- When you’re deciding on housing at any point in life, you may want to consult your long-term financial plan. A financial advisor can help you build one of these. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Loans are something every student has to deal with, especially if you’re going to grad school. SmartAsset’s student loan calculator can help you build a plan for paying them off.
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