Austin 78705 Worth it to buy non cash flowing condo for UT Son?

[Cristin Andrews]

My son is just about to start his sophomore year at UT Austin and plans to stay for Masters but may end up transferring elsewhere for Masters. Seems this area is an equity play vs cashflow. With taxes and HOA fees that equity would need to keep pace with these fee increases. In my research it seems that this area may be top of market now and therefore not worth buying at this time but I wanted to hear from those of you that know the market if my assumptions seem correct.

[Stephen Stokes]

In my humble opinion, suggest you approach from a total expense point of view using conservative estimates to compare your two options; paying his rent or owning and possibly selling when he vacates. Transaction costs are there so it may very well depend on price point and time expected to inhabit. In this case, you are forced to either rent for him or buy something for him to live in. Have you also discussed with him the possibility to have roommates? Also, the intangible impact of purchase that may sway the decision to NOT go elsewhere as desired due to the impact of you having to sell. I have always thought that if I have a kid that goes to university I will surely have the purchase a property day one because at 18 you should have established a Roth IRA and can make 100% tax free penalty free withdrawal to purchase first home and this will likely make the math for you.