RISMEDIA, Jan. 9, 2007-(MCT)-As the father of one University at Albany student, the uncle of another and an experienced rental property owner, Lee DiGiovanna considered this real estate venture tailor-made.
His daughter, Amanda, was more than ready to move off-campus for her junior year after two years of dorm living, but he and his wife were a little uneasy about what that might mean: an apartment in an unfamiliar city several hours away with an unknown landlord.
So the DiGiovannas kept their eyes open for alternatives when they came to visit Amanda from their home on Long Island. It didn't take long to find a perfect fit: a three-bedroom ranch on a quiet cul-de-sac within an easy walk of the campus. It even had an apartment above the garage.
"We were just driving around and we saw this 'For Sale' sign, and my wife said, 'We're buying it,' " DiGiovanna recalled.
Since then, Amanda DiGiovanna, her cousin, Christine Mariano, and two friends have enjoyed a homey, suburban environment that few college kids experience without the added feature of parents.
Meanwhile, Lee DiGiovanna saved substantially on room-and-board costs for his daughter, gained some rental income from the other students, and hopes to turn at least a small profit when he sells the place.
"I'm generally a cheap person, and the last thing I like to do is give my money to somebody else," he said with a laugh. "It just makes sense."
DiGiovanna, who manages an office that conducts cardio stress tests and owns other rental housing on Long Island, is among an apparently growing number of parents choosing to pair a child's college education with an investment opportunity.
"It's happening a lot more often," said Kareem Jandali, a broker and senior real estate specialist with Bryce Real Estate in Brunswick. "The prices around colleges have gone up more than the average house, and people know this."
Jandali said he has shown property to a group of four young women who attend Rensselaer Polytechnic Institute in Troy, including one whose parents are interested in purchasing a house for the group to share. The students will be sophomores next year, so the house could be a three-year college residence.
Depending on the condition and location of an apartment, as well as the number of students sharing the space, off-campus accommodations can easily cost a student $4,000 to $6,000 a year, according to estimates by parents and real estate brokers. Combined room-and-board costs on campus can be even higher.
But parents who purchase houses in college towns can ensure that the rent money stays in the family. Sometimes, they can collect enough rent from other tenants to cover the mortgage payments, and they may even sell the property at a profit once their child graduates.
"I think, because property values have gone up so much, people see everyone making money off of real estate, and they want to jump on the bandwagon," Jandali said.
The investments can have their own special headaches, though.
DiGiovanna said he spent several months traveling upstate on weekends to overhaul the kitchen at the house in Guilderland. And the arrangement does place responsibility on the son or daughter to manage the property.
"If something breaks, I have to caulk it or nail it back in place or replace the light bulbs and make sure everyone gets their rent in on time," said Amanda DiGiovanna.
But she said the gourmet kitchen she helped her father install has been a big bonus: "I'm really into cooking. We have little dinner parties."
Tom and Maureen Yurkewecz of Troy said they're sure they saved money when their son, Mark, and some hockey team friends shared a house they owned on Eaton Avenue near the RPI campus for three years.
"I think it's really good if you're close by to make sure things are going well with the house," said Tom Yurkewecz, who lives nearby.
Still, the Yurkeweczes weren't interested in becoming landlords for a new group of students after Mark graduated.
"We decided to sell because you get tired of doing that kind of thing," Yurkewecz said.
DiGiovanna was so pleased with the way the Parkwood East house worked out for his daughter that he recommended the idea to a friend, whose son was heading off to college at Cornell. The friend promptly purchased a house in Ithaca, he said.
"If your son or daughter will take care of it, certainly that asset will build value for you," said James Ader, executive vice president of the Greater Capital Association of Realtors Inc., an Albany-based trade group.
In fact, Ader said, college parents might be a more rapidly growing market if only local agents had a more natural way to make contact. "I don't know that our members know how to market to that community," he said.
With DiGiovanna's daughter, niece and their friends looking forward to graduation in the spring, the Guilderland house is back on the market. The asking price: $320,000.
Agent Louise Giuliano of Brokers Network in Latham, who handled the home's purchase for the DiGiovannas, is advertising the house both locally and in the Long Island and New York City areas, where it could draw attention from like-minded parents of UAlbany or College of Saint Rose students.
She said parents considering such a purchase should be aware that some communities have local laws limiting the number of unrelated people who can share a house or apartment.
And with the real estate market cooling, she said DiGiovanna may not make as much as he hopes on the resale.
Yet the increased peace of mind of owning the place is worth a lot, DiGiovanna said.
"You know the house, you know where the kids are. It's under your control," he said. And with his daughter hoping to attend graduate school at the State University at Stony Brook, DiGiovanna expects he'll soon be looking at houses again with his daughter's needs in mind.
And this time, "it would be a lot easier," he said. "It's only 20 minutes from my house."
Copyright © 2007, Albany Times Union, N.Y.
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