Buying a House for In-State Tuition?

[TheNolano]

Hello sdn Friends!

I know similar questions have been asked before, but I wanted to hear some feedback about our specific situation from fellow medical schoolers. First of all, I know buying a home is a huge decision, and we are considering many factors, but have yet to find any students who have been in a similar situation.

So here is the deal, I am going to a medical school that allows people to gain state residency after one year if they purchase a home and make Florida their main residence. I am married, and my wife and I are pretty sure we would prefer a home over an apartment. In-state residency would start one year after we buy the house, so essentially we would save $33k a year for M2-M4, saving a grand total of around $99k. Most of the houses we are looking at renting are in the $1,700-$2,000 range, whereas similar homes would be $1,000-$1,200 in mortgage (given a 20% down-payment). Our hope would be to buy a home and sell it after 4 years of medical school (I know this can be a big risk).

Now I know that generally speaking buying a home for medical school is not really the best financial decision, but at least on paper seems like the almost $100k of in-state savings would make up for any costs of home ownership or the market fluctuations. Furthermore, we are lucky enough to have a couple hundred grand in the bank, so if we struggled selling the house for a few months it would not be the end of the world. But it is still a huge decision, and we would love to hear some feedback.

So, any medical students out there who were in a similar decision and decided either to buy or against buying? What were your reasons, if you don't mind sharing. Any feedback would be wonderful! Thanks in advance.

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[PL198]

I'm pretty sure you can just get an apartment and become a resident of the state... It's not like the people that rent an apartment are considered to live in another state. You'll pay out of state the first year and then after that you pay in state.

 

[TheNolano]

I'm pretty sure you can just get an apartment and become a resident of the state... It's not like the people that rent an apartment are considered to live in another state. You'll pay out of state the first year and then after that you pay in state.

So the college was extremely clear that you must OWN property to get the in-state deal. We could buy an apartment or a condo, but we would rather have a backyard.

 

[maxxor]

I know people who did this in Texas and North Carolina for the same reason (in state tuition after 1 year). It worked out great for them as the CoL was low and they subsidized their mortgage by getting roommates. You probably won't do the roommate angle, but this could work out for you. They went to commuter-y schools and there was no great concentration of med students in a given area, so they didn't feel left out of social stuff because no large portion of the class lived in any one area. That's the biggest concern some people may have.

If you have the money saved, might as well investigate what you can find.

 

[deleted500612]

I'm pretty sure you can just get an apartment and become a resident of the state... It's not like the people that rent an apartment are considered to live in another state. You'll pay out of state the first year and then after that you pay in state.

I think this only applies if you were already a resident of Florida for x years before attending medical school. If any student renting an apartment for school (which is every single student) could get in-state resident status after one year of school, out-of-state tuition fees would cease to exist after first year and Universities would lose their major cash cows.

 

[rodmichael82]

I would do it. Cheaper monthly
payments for housing and student loans saved. I think it's definitely worth buying a house.

 

[Stagg737]

I'd definitely get the house. If it'll save you 99k in tuition, payments are cheaper than rent, and you can make the down payment I don't see why you wouldn't do it.

 

[deleted480308]

Double check this specifically with financial aid, I'm from florida and time spent as a full time student does not count toward establishing residency for tuition purposes

 

[jj55342]

I would caution interpretation of financial aid stuff. I'm at an OOS spot and my school went to great lengths to deny me IS tuition, even though I married a resident. They stated that I didn't come to the state with intentions on just being here without school. I would suggest getting in writing a guarantee, or close to it, that you will exactly be reverted to IS if you only buy a house.

That being said, I think it's a great idea. If you've already looked at and don't care about common reasons people don't want to live in a house then you're not making a dumb decision lifestyle wise. Financially yes you are taking on risk of you can't sell the house or can't rent it. You could try contacting a local realtor or management company not involved in the current sale to see if renting would be a good and viable market. You could also use zillow.com to see how fast houses like it turn over in the area by seeing listing durations. Importantly you can see how long your new place has been listed. If all this checks out, it is a good financial decision. Right off the bat you'd be paying about half as much in housing cost. Granted you will need to factor in repairs and property tax though. But the real clincher is that your housing money doesn't disapprar like it does for rent. For rent you never ever see that money again. For a mortgage, even in the worst markets, you still see some of that money again. If you have a savings buffer to begin with, you could already be in a position to start growing your savings rather than wasting rent monthly.

Of course you should probably talk to a financial advisor or someone with more experience than anyone on this site. If you have a few hundred thousand in the bank then I'm sure you'll have access to an investment manager who can give you basic guidance.

 

[PL198]

I think this only applies if you were already a resident of Florida for x years before attending medical school. If any student renting an apartment for school (which is every single student) could get in-state resident status after one year of school, out-of-state tuition fees would cease to exist after first year and Universities would lose their major cash cows.

I guess it depends on the state. In my state, the apartment is enough to establish residence after a year

 

[deleted480308]

An apt is 100% not enough in florida unless you are here for 12months not attending school prior to school starting

 

[marauderette]

I found this info on 22 states, confirming the previous post:

"Florida has been primary domicile for at least the 12 months immediately preceding the in-state classification. The 12-month requirement cannot be met by attending college full-time in the state."

http://www.cga.ct.gov/2000/rpt/2000-R-0239.htm

 

[jj55342]

I wouldn't rely on any info that says what you need to be classified as in state except the financial aid office specifically adressing your specific questions. In my state different schools have different criteria for tuition, even different amongst degree programs at the same institution. This is way too big of a purchase to not have something in writing specific to you.

 

[colbgw02]

I guess it depends on the state. In my state, the apartment is enough to establish residence after a year

I think your confusion is because the rules for establishing domicile in a general sense are different than those used for in-state tuition. Someone who moves to a state for a job and rents an apartment is definitely a resident of that state, and he/she will be expected to act accordingly (pay state taxes, get new driver's license, etc.). But each state uses separate criteria for determining in-state tuition, which may or may not overlap with general domicile. I believe in Virginia, for example, says that once you're an out-of-state student, you're always an out-of-state student, even if you are otherwise a Virginian through and through.

 

[WingedOx]

Ask the schools specifically.

Some schools are extremely liberal about residency (Ohio)

Some are quite the opposite (NC)

 

[TheNolano]

I would caution interpretation of financial aid stuff. I'm at an OOS spot and my school went to great lengths to deny me IS tuition, even though I married a resident. They stated that I didn't come to the state with intentions on just being here without school. I would suggest getting in writing a guarantee, or close to it, that you will exactly be reverted to IS if you only buy a house.

That's a great point. I have talked to two people who did this at my school, and they made it sound straightforward, but you're right I should know for sure before I dive in.

 

[W19]

Hello sdn Friends!

I know similar questions have been asked before, but I wanted to hear some feedback about our specific situation from fellow medical schoolers. First of all, I know buying a home is a huge decision, and we are considering many factors, but have yet to find any students who have been in a similar situation.

So here is the deal, I am going to a medical school that allows people to gain state residency after one year if they purchase a home and make Florida their main residence. I am married, and my wife and I are pretty sure we would prefer a home over an apartment. In-state residency would start one year after we buy the house, so essentially we would save $33k a year for M2-M4, saving a grand total of around $99k. Most of the houses we are looking at renting are in the $1,700-$2,000 range, whereas similar homes would be $1,000-$1,200 in mortgage (given a 20% down-payment). Our hope would be to buy a home and sell it after 4 years of medical school (I know this can be a big risk).

Now I know that generally speaking buying a home for medical school is not really the best financial decision, but at least on paper seems like the almost $100k of in-state savings would make up for any costs of home ownership or the market fluctuations. Furthermore, we are lucky enough to have a couple hundred grand in the bank, so if we struggled selling the house for a few months it would not be the end of the world. But it is still a huge decision, and we would love to hear some feedback.

So, any medical students out there who were in a similar decision and decided either to buy or against buying? What were your reasons, if you don't mind sharing. Any feedback would be wonderful! Thanks in advance.

I am familiar with FL housing market (especially S FL and the Orlando area), so you will have no problem selling the housing after med school as as long the market remains the way it is now... That decision is a no brainer IMO since it will save you 1ook...

 

[darklabel]

Sounds like a great deal and I would definitely do it.

But make triple sure with the school that you will receive the in-state tuition next year before you make it official. Most schools usually lock you into OOS tuition from the first year on.

 

[collegestud2013]

Sounds like a great deal and I would definitely do it.

But make triple sure with the school that you will receive the in-state tuition next year before you make it official. Most schools usually lock you into OOS tuition from the first year on.

This. I'm also an OOS student going to med school in Florida have tried to get in-state tuition.
Unfortunately, the law in FL (so this would apply to all FL med schools) is that you can't made FL your home state for just tuition purposes (in other words, FL specifically prohibits you from moving there to get IS tuition) whether you buy a house or not. For this reason, the time you spend living in FL during med school does NOT count toward time as an in state resident for tuition purposes. So the only ways an OOS could get in-state tution is: 1) to have lived in Florida for last one year prior to starting medical (or have parents who have done so if you're a dependent), or 2) marry a FL resident and wait one year (in which case yo would be FL resident regardless of a home purchase). Fortunately the OOS tuition at my school is only about $6700 more than in-state so it's not a deal breaker.

On the other hand, buying a house for investment purposes isn't a good idea right now with the housing prices at an all-time high and essentially leveling off (unlike back in 2010-2011). Unlike more liquid investment assets, you can't exactly sell a house overnight (unless you're willing to take a huge loss). If there is another housing bubble, the value could drop well over $100k and you would be stuck with it while waiting for prices to go back up.

Also, since you have a couple hundred grand in the bank I wouldn't worry too much about it too much. I'm wondering how is this even possible for a med student (assuming they didn't win the lottery, get a big inheritance, and are just straight out of undergrad and thus haven't worked and saved up any significant).

 

[Don_Manco]

After you make sure you WILL qualify, I would do it. If you need to know anything about the Florida housing market to help in your decision is that now is the best time to buy. It was hit really hard in '08 but the prices are on the rebound. Also, what was suggested if it is near a place where college students look for housing, it would be great business to rent it out after you are done.

 

[PL198]

How is now the best time to buy.. 08-09 right after the Bubble was best time to buy. Prices are up now

 

[W19]

Correction: 2009-2011 was the best time to buy...

 

[Raryn]

I remember a thread here from a few years back that said Texas used to have a funny loophole. All the rules said is that if you own land (any land) in Texas, you could claim in-state tuition. Supposedly some students were buying *grave plots* and using their title to that land and it was flying, until the loophole was closed. Not sure if it's true, but funny either way.

 

[Don_Manco]

Fair enough. Point is that it is still a sound investment, especially when you consider the 100k in savings.

 

[TheNolano]

This. I'm also an OOS student going to med school in Florida have tried to get in-state tuition.
Unfortunately, the law in FL (so this would apply to all FL med schools) is that you can't made FL your home state for just tuition purposes (in other words, FL specifically prohibits you from moving there to get IS tuition) whether you buy a house or not. For this reason, the time you spend living in FL during med school does NOT count toward time as an in state resident for tuition purposes.

Also, since you have a couple hundred grand in the bank I wouldn't worry too much about it too much. I'm wondering how is this even possible for a med student (assuming they didn't win the lottery, get a big inheritance, and are just straight out of undergrad and thus haven't worked and saved up any significant).

Again - great point that I need to be 1000% sure. From what the financial aid office pointed out, since I am married and can claim that part of the reason I am in Florida is for my wife's job. Furthermore, after 12 months of owning a house, she IS a Florida resident, and I get in-state being married. But I agree, the law seems written in a slightly different way than the financial aid office says. Thanks for your experience.

And, on the second note, when I was born my dad bought a couple thousand dollars of a small company called Apple in order to pay for my future college. Best. Decision. Ever. Seriously, I am incredibly lucky. But, I think it actually makes us more frugal. We want to go through medical school with no debt since we are spending our own real money. 100k of instate savings is just too good to pass up for anything.

 

[Me.D.]

Again - great point that I need to be 1000% sure. From what the financial aid office pointed out, since I am married and can claim that part of the reason I am in Florida is for my wife's job. Furthermore, after 12 months of owning a house, she IS a Florida resident, and I get in-state being married. But I agree, the law seems written in a slightly different way than the financial aid office says. Thanks for your experience.

And, on the second note, when I was born my dad bought a couple thousand dollars of a small company called Apple in order to pay for my future college. Best. Decision. Ever. Seriously, I am incredibly lucky. But, I think it actually makes us more frugal. We want to go through medical school with no debt since we are spending our own real money. 100k of instate savings is just too good to pass up for anything.

Question: how did this work out for you? I'm pretty much in the exact same situation and would also LOVE some in-state tuition...

 

[TheNolano]

Question: how did this work out for you? I'm pretty much in the exact same situation and would also LOVE some in-state tuition...

Thanks for the reminder! This worked out well so far. I just received residency reclassification today, and I will officially be an in-state resident for tuition purposes for years 2-4. Yay! About $100k of savings!

It honestly was a lot easier than I thought. My wife and I bought a house in July, filled out all the paperwork as soon as we could, and I applied for residency reclassification a couple weeks ago. They asked for some paperwork, I sent it over, and that was that. Easy. My mortgage for a 3 bedroom 2 bathroom with a yard is less than some of my colleagues pay for rent.

I will have a full financial update on this thread after I graduate, but so far I would say it was 100% worth it and as easy as could be. Couldn't be happier. If anyone has questions (specific to Florida) please shoot me a message.

Thanks to all who encouraged me!

 

[TheNolano]

Since a couple of people have asked, page 12 of this document, section 5.2 explains the process of reclassification. This is the official guide from the Florida Department of Education, and lays things out pretty clearly. The main thing is "The primary objective of the section is to require students to submit documentation that clearly and convincingly demonstrates the establishment of permanent legal residency in Florida for at least 12 consecutive months and that such residency is not on a temporary basis for the purpose of obtaining an education." Notice it says 12 months, but not necessarily 12 months before school starts. This allows you to reclassify after one year. I argued that since my wife and I bought a home, filled homestead and residency documents, and that she has a job, we are permanent residents. Even if I do move after medical school, this showed the state that I originally intended to stay in Florida.

https://www.flvc.org/documents/9685...2015.pdf/832898a5-ad3e-4637-b39a-54150199851d

 

[Darth Doc]

Again - great point that I need to be 1000% sure. From what the financial aid office pointed out, since I am married and can claim that part of the reason I am in Florida is for my wife's job. Furthermore, after 12 months of owning a house, she IS a Florida resident, and I get in-state being married.

I'm not in FL, but my state has the same rules. As soon as we hit the 12 month mark, I submitted a request to become an in-state student based on my husband being my supporter and a resident of the state. I also had changed our license plates, voting status, etc.. It worked! I am now an in-state tuition student. Feeling REALLY lucky I was accepted in this state.

 

[Jalby]

So even if it doesn't get you residency, buying a house is still a good investment plan. I would actually take it one step further. At the end of your four years, instead of trying to sell it, ask the admissions department if there are any families coming in the next year. Try to rent it to an incoming first year. Then hopefully you can rent it for four years after you are done and make a TON of money off of it.

 

[Munty]

The school I am looking at in Florida has a list of steps like switching over license, voter registration, insurance, independent status etc. They say after that point you can apply for instate for M2 onwards and almost all students get reclassified as IS specifically by the school if they follow the list of steps (none of which involve buying a house or marrying anyone and can be completed while in school). My friend who is an M2 said all of her OOS friends got reclassified.

Another FL school told me there was no way to reclassify as IS for tuition purposes. So it seems to vary by school, and it's a risk that scares me.

 

[TheNolano]

Another FL school told me there was no way to reclassify as IS for tuition purposes. So it seems to vary by school, and it's a risk that scares me.

That is a good point, I was afraid of that too. Without giving away who I am, I go to FAU, so my advice might be a bit FAU specific. I can say I know a few people in every class who have been reclassified, and not all of them are married. That being said, they all bought property here.