Chicago Real Estate Stats: Dorm vs Buy for Chicago Colleges & Universities

A friend of my mother’s has a son who will be attending Lake Forest College in the fall. (Congrats!) She asked via my mother’s Facebook profile whether it would be better for her to board her son in the dorms, with the mandatory bundled meal plan, or to rent an apartment or buy a condo nearby for the duration of his 4 year stay. It seemed like a question that lots of parents would have so I’ve done an analysis not only for Lake Forest College but for 9 other Chicago area colleges and universities as well.

Dorm life is a critical and classic part of a college education and as much learning goes on in the dorms as in the classroom. When reading these numbers it’s crucial to remember that saving money is not the only thing at stake, but your (or your child’s) development into an independent adult.

Methodology

  • For calculating the dorm costs, I took the average published rates for 2012-2013 for a 10 month stay in a dorm room shared with one roommate. I used each college’s website for the rates.
  • For meal plans I always took the cheapest option available to freshmen.
  • For rentals I took an MLS average rent rate for 1 bedroom apartments within a 1 mile radius of the school over the past year, then added in $160 per month for a thrifty grocery bill and $282 per month for utilities. For the two Loop Colleges (Columbia & SAIC) I bumped the grocery bill to $200 per month to offset the higher downtown sales tax rates.
  • For “Monthly Cost to Own” I took the average 2 bedroom condo purchase price and assumed a 20% down payment at 4.25% interest and $350 per month in assessments. I broke that down to a monthly payment and split it in two to figure that the 2 bed would be shared with a rent-paying roommate. I then added the same grocery and utility bill as I did for rentals.
  • For buy vs rent vs dorm I used Michael Bluejay’s excellent rent vs buy calculator (the deluxe version) with reasonable figures for the Chicago market over the next 4 years: 2% property appreciation, 2% return on long-term CD’s, 5% annual rent inflation, a 5% agent commission on resale, and the same loan-to-value numbers as above.
  • I did not even look at tuition – it isn’t within the scope of this study. I also did not count any penalties for students living off campus, although I did notice at least North Park charging $2000 per year to exempt students from dorm life and the meal plan.

Columbia College Chicago

columbia college logoMonthly Dorm: $1160
Monthly Rent: $2272
Monthly Cost to Own w. Roomie: $1790

Ownership vs Rental: It would take 5 years for a purchase to turn a profit over an apartment.

Ownership vs. Dorm: 30+ years for a purchase to turn a profit over Dorm living.

Best option: Dorm.


Depaul University, Lincoln Park Campus

Depaul Unversity LogoMonthly Dorm: $1127
Monthly Rent: $1822
Monthly Cost to Own w. Roomie: $1584

Ownership vs Rental: 6 years to profit.

Ownership vs Dorm: 26 years to profit.

Best option: Dorm.


Illinois Institute of Technology

IIT logo


Monthly Dorm: $1150
Monthly Rent: $1509
Monthly Cost to Own w. Roomie: $909

Ownership vs Rental: 1 year to profit

Ownership vs Dorm: 2 years to profit

Best option: Buy a condo.


Lake Forest College

Lake forest college logoMonthly Dorm: $905
Monthly Rent: $1428
Monthly Cost to Own w. Roomie: $1310

Ownership vs Rental: 5 years to profit

Ownership vs Dorm: 23 years to profit

Note: With Lake Forest College’s suburban location, the number of for-sale 2 beds and the number of rentals available were drastically lower than in the city. Even if it weren’t for the cost differential, for reasons of inventory alone I would say…

Best option: Dorm.


Loyola University, Rogers Park

Loyola university logoMonthly Dorm: $1157
Monthly Rent: $1375
Monthly Cost to Own w. Roomie: $971

Ownership vs Rental: 2 years to profit

Ownership vs Dorm: 3 years to profit

Best option: Buy a condo.


North Park University

North Park University logoMonthly Dorm: $733
Monthly Rent: $1319
Monthly Cost to Own w. Roomie: $925

Ownership vs Rental: 1 year to profit

Ownership vs Dorm: 11 years to profit

Best option: Dorm.


Northwestern University, Evanston Campus

Northwestern University LogoMonthly Dorm: $1242
Monthly Rent: $2044
Monthly Cost to Own w. Roomie: $1250

Ownership vs Rental: 2 years to profit.

Ownership vs Dorm: 10 years to profit.

Best option: DORM.


School of the Art Institute of Chicago (SAIC)

School of the Art Institute of ChicagoMonthly Dorm: $1240
Monthly Rent: $2272
Monthly Cost to Own w. Roomie: $1789

Ownership vs Rental: 5 years to profit

Ownership vs Dorm: 27 years to profit

Best option: Dorm.


University of Chicago, Hyde Park

University of Chicago LogoMonthly Dorm: $1281
Monthly Rent: $1497
Monthly Cost to Own w. Roomie: $864

Ownership vs Rental: 1 year to profit

Ownership vs Dorm: 2 years to profit

Best option: Buy a condo.


University of Illinois, Chicago (UIC)

UIC LogoMonthly Dorm: $1011
Monthly Rent: $1947
Monthly Cost to Own w. Roomie: $1322

Ownership vs Rental: 3 years to profit

Ownership vs Dorm: 22 years to profit

Best option: Dorm

There you have it, 10 colleges. If you’d like me to analyze another Chicagoland college I’m happy to do so, just leave a comment. Likewise, if you’re reading this a few years in the future give me a quick poke and I’ll update the numbers.

All logos are property of their respective schools.

 

Print Friendly

3 Responses so far.

  1. Caroline Watanabe says:

    Thank you Kay! This is very enlightening information. I realize Lake Forest is in a pricey neighborhood making it all the more difficult to find thrifty off-campus housing. Living farther than the one mile radius used in your calculations might bring better results, but then transportation costs come into the equation. Hugh is hoping to find something by his junior year at which time he’ll be a lot more familiar with the area, and might have a few friends who would be willing to share a place with him. Dorm life is certainly an important part of college life that one shouldn’t pass up, but since Hugh was in a dorm for 4 years at prep school, I think getting his foot wet with renting an apartment and the responsibilities that go along with it as well as preparing his own meals while in college would be a big plus for him.

    • Kay Cleaves Kay Cleaves says:

      Hi Caroline! Thanks for the comment. Lake Forest is pretty pricey and the rental housing that I could see is pretty scarce. The college may have some affiliations with off-campus landlords that were invisible to me. A larger number of roomies would make an apartment more affordable – I went based on a 1 bed, but going up to something like a 3 or 4 bed might tip the scales in favor of renting for a couple of years.

      Best of luck to you and to Hugh, let me know if I can help any further!

Hi! Please note that I'm no longer a licensed Realtor and I don't check the comments very often anymore. You're welcome to leave questions but be aware that it may be a few months before I see it. For faster response, please use the Contact page to email me your questions.

-Kay C.

Leave a Reply

Your email address will not be published. Required fields are marked *