It’s Friday in Texas, which means two things. Somebody in your family is already arguing about tomorrow’s game. And somebody just paid another month of rent for a student apartment near campus.
If you’re the parent writing those checks, the question has probably crossed your mind somewhere between kickoff and the final whistle. Should we just buy a house near campus?
Here’s the short answer. For some families, buying near campus is a smart play that builds equity instead of paying a landlord. For others, it’s a fumble waiting to happen. The difference comes down to three things: how long you’ll own it, how the loan is structured, and whether the numbers still work after taxes, insurance, and upkeep.
Let’s break down the game film.
The Tale of the Tape: Four Years of Rent
Before you decide to buy a house near campus, look at what renting really costs. In our guide to Texas college town home prices, we pulled average rents for homes in major Texas college cities. Here’s what four years of that rent adds up to.
Waco (Baylor): $1,369 a month, or about $65,700 over four years
Fort Worth (TCU): $1,615 a month, about $77,500 over four years
Arlington (UT Arlington): $1,462 a month, or about $70,200 over four years
Dallas (SMU): $1,591 a month, abut $76,400 over four years
College Station (Texas A&M): $1,446 a month, or about $69,400 over four years
Denton (UNT, TWU): $1,480 a month, or about $71,000 over four years
Austin (UT Austin): $1,615 a month, or about $77,500 over four years
Fort Worth and Austin tie for the most expensive rent on our list, so TCU and UT parents feel it the most. Those figures are average rents for a whole home, not a single bedroom. Your student’s share in a shared apartment may be lower. Still, the scoreboard is clear. Four seasons of rent can easily top $65,000, and none of it comes back to you.
But rent is only half the matchup. Owning has its own costs, and some of them don’t show up until the second half. Our guide on whether to rent longer or buy now walks through how to compare the two fairly.
Pick Your Formation: 3 Ways Parents Can Buy Near Campus
Every good game plan starts with the right formation. When parents buy a house near campus, the loan usually lines up one of three ways. Each has different rules for down payment, roommates, and taxes.
Formation 1: Buy It as a Second Home
In this setup, you own the home. Your student lives there, and you use it too for move-in weekends, visits, and home games.
Lenders generally view a second home more favorably than an investment property. Conventional second-home loans typically require at least 10% down.
The catch is rent. A second home generally can’t be rented out. If your student’s roommates pay you rent, the home likely no longer qualifies as a second home.
Location can matter too. Some lenders look at how far the home is from your primary residence. A condo in Denton will be too close to a Flower Mound home to count as a second home. A home near TCU may raise the same question for a family in Southlake or Keller. A place in College Station or Waco usually won’t.
Formation 2: Buy It as an Investment Property
If roommates will be paying rent, plan on this formation. You own the home, and it’s treated as a rental property.
Conventional investment property loans typically require at least 15% down, and rates are usually higher than on a second home. Lenders will also want to see cash reserves after closing. Our article on how much cash reserves you need explains what they look for.
Some parents use a DSCR loan instead. A DSCR loan qualifies mostly on the home’s rental income rather than your personal income. Our guide to DSCR loans explains how it works.
The upside of this formation is flexibility. After graduation, the home can stay a rental and keep producing income.
Formation 3: Your Student Owns It, and You Co-Sign
In this formation, your student is the buyer and lives in the home as a primary residence. You join the loan as a non-occupant co-borrower, and your income helps qualify.
Many conventional and FHA loan programs allow this. FHA can allow a family co-borrower with as little as 3.5% down. Your student starts building credit and equity at 19 or 20 years old.
Because it’s your student’s primary residence, they may also be able to claim the Texas homestead exemption. That can lower property taxes, a big deal in Texas.
The trade-off is real, though. Your name is on the loan, and your student’s name is on the title. Before choosing this play, ask an honest question. Is your student ready for the responsibility of owning a home?
Special Teams: Can Roommates Help Pay the Mortgage?
Roommates are the special teams of this plan. They can change the whole game, but only if they’re handled right.
Rent from roommates can cover a big share of the monthly payment. How that rent affects your loan depends on your formation. In Formation 1, rent generally isn’t allowed. In Formation 2, it’s expected. In Formation 3, your student can usually rent spare bedrooms to friends while living there.
Before you count on roommates, check two things.
City rules. Some Texas college cities limit how many unrelated people can live in one home. Check the local ordinance and any HOA rules first.
The friendship factor. Nothing tests a friendship like a late rent payment. Use a written lease, even with friends. And decide ahead of time who collects rent and handles repairs.
Hidden Yardage: The Costs Rent Comparisons Miss
A rent-versus-buy comparison that stops at the mortgage payment is like judging a game by the first quarter. Owning brings costs that renters never see.
Property taxes. Texas property taxes are among the highest in the nation. In Formations 1 and 2, you won’t have a homestead exemption on the home near campus, so you’ll pay the full rate.
Insurance. Texas homeowners insurance has climbed in recent years, especially in hail-prone areas. Rental properties may need a landlord policy, which can cost more.
Upkeep. Four students under one roof means wear and tear. Budget for repairs, carpet, paint, and the occasional mystery stain.
Summer vacancy. Many students leave between May and August. If roommates don’t pay year-round, you cover those months.
This is where our PITI Calculator earns its spot on the roster. It adds principal, interest, taxes, and insurance together, so you can compare the true cost of owning with four years of rent.
Clock Management: When to Buy and When to Sell
In football, the best teams manage the clock. The same is true when you buy a house near campus.
Buy early. Four years is a short time to own a home. Buying and selling costs can eat into any gain in a short hold. Buying before freshman year gives you the most time to build equity. Buying for a senior’s final year rarely makes sense.
Watch the leasing calendar. In many college towns, student leases for next fall are signed months in advance. If you want roommates lined up by August, start house hunting in the spring.
Plan your exit. Before you buy, decide what happens after graduation. Will you sell? Keep it as a rental? Hand it down to a younger sibling? Each answer points to a different formation.
Read the market. Prices near most Texas campuses are flat or down over the past year, which gives buyers room to negotiate. Our Buy Now vs. Wait tool shows what waiting could cost you.
Know When to Punt
Sometimes the smartest play is to punt. Buying near campus may not be the right move if:
Your student has only a year or two left.
The purchase would stretch your budget or drain your retirement savings.
Your student may transfer, study abroad, or move home.
You have no interest in being a landlord.
You’d need to buy far above what similar homes rent for.
Most lenders are focused on getting you approved. We’re focused on something more important: helping you make the right decision. Sometimes that decision is to keep renting.
The Game Plan: 5 Questions to Answer Before You Buy
If you’re serious about buying a house near campus, work through these five questions first.
1. How long will we own it, and what’s our exit plan?
2. Which formation fits: second home, investment property, or student-owned?
3. Will roommates pay rent, and do local rules allow it?
4. Where will the down payment come from? Many DFW parents use equity from their own homes. Our article on how much equity you can access in Texas covers the rules.
5. Can we comfortably afford it, including taxes, insurance, and summer vacancy? Start with our guide to how much house you can afford.
Once you have answers, get pre-approved before you start touring homes. Our guide to mortgage pre-approval explains the process. If your student is headed to UNT or TWU, our look at what it’s like to live in Denton is a good place to start scouting.
At Texas Mortgage Plan, our team includes a licensed Texas Realtor as well as mortgage planners. That means we can help you look at both sides of the field: the house itself, and the best way to pay for it.
NEXT STEP
Run the numbers before kickoff. Our free PITI Calculator shows the full monthly cost of owning, including taxes and insurance, so you can compare it with four years of rent.
Try the PITI Calculator
Want to see what fits your budget first? Try our Home Affordability Calculator, or browse all of our free tools.
Home Affordability Calculator → check your numbers here.
See All Mortgage Calculators
RELATED ARTICLES
Texas College Town Home Prices: A 2026 Guide for Parents
DSCR Loans Explained
How Much Equity Can You Access in Texas?
Should You Rent Longer or Buy Now?
FREQUENTLY ASKED QUESTIONS
Loan Options for Parents
Q: Can parents buy a house for their college student?
A: Yes. Parents usually buy the home as a second home or an investment property. Another option is for the student to buy the home as a primary residence, with a parent co-signing as a non-occupant co-borrower.
Q: What’s the difference between a second home and an investment property?
A: A second home is for your family’s own use and generally can’t be rented out. An investment property is meant to produce rental income. Investment properties usually require a larger down payment and carry higher rates.
Q: How much do I need for a down payment?
A: It depends on the formation. Conventional second-home loans typically require at least 10% down, and investment properties at least 15%. If your student buys as a primary residence with you as co-borrower, some FHA loans allow as little as 3.5% down.
Roommates and Rent
Q: Can my student rent rooms to roommates?
A: Often, yes. If your student owns and lives in the home, renting spare bedrooms to friends is usually allowed. If you own it as a second home, renting it out generally isn’t allowed.
Q: Are there limits on how many roommates can live in a home near campus?
A: Some Texas college cities limit how many unrelated people can share one home. HOAs may have their own rules. Check both before counting on rental income.
Costs and Timing
Q: Is it cheaper to buy a house near campus than to rent?
A: Sometimes. Four years of rent near a Texas campus can top $65,000. But owning adds property taxes, insurance, repairs, and possible summer vacancy. Run both sides before deciding.
Q: When is the best time to buy near campus?
A: Ideally before freshman year, so you own the home long enough to build equity. Start shopping in the spring if you want roommates lined up for the fall.
Texas Mortgage Plan – 50+ years of combined mortgage experience, serving homeowners and homebuyers across Flower Mound and the DFW Metroplex. Elizabeth Rose, NMLS 252686, CDLP® Certified Divorce Lending Professional | Shea Patton, Mortgage Advisor, NMLS #251397, Licensed Realtor. Texas Mortgage Plan is a d/b/a of Legacy Mortgage, NMLS #1759275 | Equal Housing Lender
