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Student homeowners could soon be on the rise

BY NINA EARNEST | DECEMBER 06, 2010 7:20 AM

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Paige Rueter's house is set for Christmas. The tree is lit, and the mantle decorated amid the mismatched furniture, passed down from various family members that typify college housing. It looks like a family home — but it's peppered with the disarray of student living.

"It's still a college house," Rueter said.

But Rueter, a University of Iowa junior from Des Moines, isn't renting, as several of her friends do. Instead, she is a manager on the lease of the home her parents bought five years ago.

Home ownership for students appears to be rare. But experts say parents buying property for college-age students is steady — and it could take off in the recession's real-estate market.

"The potential is there for parents to make a good investment," said Mel McMorris, an agent from Coldwell Banker Real Estate Professionals, 70 Sturgis Corner Drive.

Michelle Wardlaw, spokeswoman for the National Association of Realtors, said 18 percent of investment home buyers and 13 percent of vacation homes are primarily bought for a relative's use.

And the relative tends to be a child in college, she said.

Today's low home prices could lead to an increase in parents buying property for university students, she said.

"It seems like that would be the assumption," Wardlaw said. "But there's no way of actually knowing that for sure."

In the Iowa City region alone, Coldwell Banker's research for this year found a general 3 percent decrease in the area's housing prices. The soft market, McMorris said, could be an appealing investment to parents with children attending the UI at the same time.

Rueter's father, Todd Rueter, decided to purchase the $180,000 home knowing his older son Alex and Paige would go to school at the UI.

UI junior Michael Seedorff, who has lived in a condo since his sophomore year, said his parents also considered the possibility of his younger brother attending the university when purchasing his home.

"They thought it would be more efficient money-wise," he said.

The benefits of parents' purchasing homes for students goes beyond Iowa City.

T.J. Wilkerson, a sophomore at Iowa State University, lives in a two-story single family home his parents purchased for around $177,000 in March 2008.

Todd Rueter and Dave Wilkerson plan to sell their properties after their younger children graduate.

"Right now, I don't want to be a long-term landlord," Dave Wilkerson said. "But we'll have to see what the market's like at that time."

T.J. Wilkerson said he couldn't think of any disadvantages in living in the house first occupied by his older brother, Derek.

But as a manager on the lease, he accepts he has more responsibility as a student homeowner.

Mowing the lawn, fixing the furnace, and raking the leaves all fall under the students' job description.

Paige Rueter recognized taking care of a home could be more responsibility than many college students want to take on. Though her roommates help, balancing friendship with business can be a source of concern.

"It's hard to make them feel like I'm not a landlord," Paige Rueter said.

Her father said the added responsibility was another reason he bought the house.

"I think it prepares them a little bit for what they're looking at after they're out of school," Todd Rueter said.


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