More than 300,000 college students call the Boston area home, and they all need places to live. Now, parents are finding a more economical way to house them: in condominiums.

What convinces a parent to buy property for a college student, rather than assuming that he or she will live in a dorm or apartment? It may not take much. "Particularly in markets where housing is tight and more expensive," says Chip Newman, a mortgage loan originator with Poli Mortgage Group Inc. of Norwood. Newman, who has three sons attending college out west, says when it comes to their living expenses, "Housing is the lion's share of it."

Here in the Boston area, where housing costs might easily run $10,000 or more per year for an obsolete dormitory room or a rundown rental, parents are ready to embrace alternatives. Families are finding that purchasing off-campus condominiums for their students is one way to defray the cost of room and board, provide tax breaks on the mortgage and build up equity over time while benefiting from appreciation.

"It's one segment of the market that hasn't slowed down," says Ralph Aucella of Keliher Real Estate on Newbury Street. Aucella, now has been with the firm since 1998, has sold a number of collegiate condos to parents from out of state, especially New York and California, and out of country, from the Middle East, Latin America and elsewhere. "The parents that are buying are very savvy, and they know how to check into the building. They're coming in from everywhere," he says, "And they're used to a high quality of life."

The parents are not necessarily purchasing the largest condos, but they are drawn to units that are attractively renovated. Although Aucella has sold units as small as 400 square feet to these families, many of the places they're buying have the same finishes as found in luxury condos, such as stainless steel kitchens and marble bathrooms.

"They like to see things shiny and clean," Aucella says. He mentions 75 Burbank St. in the Symphony/Fenway area as an example of a building with smaller, fully renovated properties. The units may be tiny, but they have all the amenities. Storage space, for example, is plentiful. "Seventy-five Burbank has extra storage downstairs," says Aucella. Buyers' children attend schools close to their respective campuses, including the Berklee College of Music and the New England Conservatory.

Sometimes families choose to invest in a condo together. In the case of two young women attending Northeastern University, the fathers purchased a two-bedroom apartment for them to share. Ideally, a two-bedroom unit would have enough space between the bedrooms to allow privacy. When students are sharing a home, parents generally make sure that the bathroom, if there's only one full bath, is located off a hallway or the living room, and not adjacent to one of the bedrooms. Units in some buildings have laundry hookups in closets or bathrooms.

In addition to providing all the comforts of home, parents are interested in providing homes that allow for their residents' safety. "The Gainsborough Street Condominium Associations have hired their own private security squad," says Aucella. "Each building is set up with cameras in front."

Judith Berman, property manager for 15 North Beacon in Allston, also cites building security as an incentive for parents to purchase units for their children. She thinks proximity to campuses, or at least to public transportation, is crucial as well. "They scour the ads like everyone else," she says. "It's the location and the convenience."

Students are likely to be drawn to the mood inside some of these buildings where Aucella describes owners as, "...a mix of first-time buyers and parents of college-age children." He's confident that the residents of these buildings are fine neighbors. "I always tell people that, despite what you hear about students, they're going to schools that cost $30,000 to $40,000. They're good tenants," he says.

A typical 500-square-foot unit in the Fenway may sell for $300,000. "You'd be hard pressed to find a studio in the Fenway neighborhood for under $200,000, " says Aucella. "The price per square foot can't be far off from the Back Bay."

Aucella believes that most of the parents will hold onto these units for at least three years. When the child graduates, he thinks that half of the parent-owners will sell and half of them will rent the condos to other students, although time will tell.

While a child is attending college, there may be additional financial advantages that accrue to families owning student condos. Newman, the mortgage originator, says that parents reducing equity in their primary residences to invest the money in a student condo may find this has positive ramifications on the amount of financial aid for which their child qualifies. In some situations, a student with her own trust fund may find that investing some of the money in a personal residence may make her eligible for some financial aid.

Sometimes, the purchase of a condo for students in the family can have unexpected consequences. A family from Mexico City looking for a condo for their sons, one attending Bentley College and the other Suffolk University, found two completely renovated units in a building on Newbury Street.

"They fell in love with the units," says Aucella, "and bought the penthouse for themselves."

When looking for alternatives

In the book "Profit by Investing in Student Housing." (Kaplan), author Michael H.Zanransky recommends that parents look for the following in student housing investment properties.

• New properties with modern amenities.
• Located near major university campuses.
• In a high-enrollment growth state with a low ratio of university-owned dorm beds to enrolled students.
• A community with old, obsolete dorm rooms.
• Students who are allowed to live in private housing.
• Lack of competition form new-construction student housing.
• Growing student enrollment.

In the short run, depending on how much money parents put down, they might actually be paying more for a college condo that they would for a rental. "But they get tax breaks and a much nicer place for the student to live," says broker Ralph Aucella. "It's also good for the student. They're learning about a condo association, learning how to be a good neighbor." Judith Berman form 15 North Beacon puts it this way: "It's on-the-job training for life."

Published: September 23 2006