When parents buy the dorm

When their son Benjamin was ready to move off campus for his junior year, Michael and Susan Leitner bought a condo near the University of California, San Diego.

"It [cost] maybe a little more than if we had paid just for his housing and school, but given the tax deductions and other benefits of real estate ownership, it made sense to do it," Mr. Leitner says in a phone interview from San Jose, Calif.

As an unexpected bonus, their younger son, Daniel, chose the same school. He'll be moving into the place this fall when Benjamin leaves for graduate school.

The condo is in the parents' names, but they have given their sons responsibility for collecting rent from roommates and using that money to pay for all their school costs.

Benjamin has also had to make a bit of a lifestyle change - becoming the go-to guy when something needs fixing.

"When I was living on campus and something was wrong, I would just call Res Life [the Residential Life Office]," he says.

And what about when mom and dad come to town and, in effect, do a landlord's inspection? Not a big deal, Benjamin says.

"My mother always complains that the carpet's not clean," he says, "but it was a mess before" he moved in.

Dad admits to having to bite his tongue at times. "There are things that landlords can't do but you want to do as a parent, like questions about liquor or [comments like] 'You've decorated this in a funny way.' " Leitner says with a laugh. "You just have to separate the roles, and it's not always easy."

But it's been worth it, he says. "As long as property values are holding up, it's a great way to put your kids through school."

Before buying housing for your college-bound child (one expert calls them "kiddie condos"), here are some steps experts say you should take to determine if it's a wise investment:

• Research the strength of the college town's housing market and its prospects for staying strong. Consider whether you're willing to find renters after graduation if the market goes south and you need to wait for a turnaround.

• If more than one of your children is likely to attend school in the area and use the property, then you'll probably save more money. But also consider the implications if your children fail their courses or decide they want to transfer to a different school.

• Examine the rental market closely. If you are counting on renters to help pay the mortgage, make sure that you can keep the unit occupied year-round.

• Factor in the cost of upkeep and liability insurance. Such costs can run higher than you're used to, especially if some party-hearty students end up living at the house.

• Decide if the purchase fits in with your overall investment portfolio. If you put money into a second home, for instance, will you still have the right proportion of liquid assets in case of emergency?

Also, when shopping for a house or condo for a student:

• Keep in mind that because of the school calendar, early spring and December are the best times to buy in many college towns.

• Consider paying a consulting fee to an appraiser or broker in the area - separate from anyone trying to sell you a particular place - to advise you on the value of properties.

• If you don't plan to keep the house beyond graduation, an adjustable-rate mortgage may be a good financing option.

• Consult with a financial planner about whether it's best to cosign for the house in the student's name or buy it as a second home yourself. If it's in the student's name, it helps him or her build up good credit history. And if it's an owner-occupied house instead of a rental property owned by parents, the student will be able to shield any profits from the sale (up to $250,000) from capital-gains taxes.

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