Background: Students’ accommodation might influence their growth, behaviour and study performance. There is no clarity yet about safety issues, trends in substance abuse and on effect of type of accommodations on students’ academic performance. Objectives: To compare students’ perceptions regarding in campus and off campus accommodations with respect to cost, benefit and risks associated with them and also to investigate whether type of accommodation affect medical students’ academic performance. Materials and Methods: In this cross sectional study, the data was collected using newly designed validated questionnaires from students who had stayed in campus accommodation (n=100) and students who had stayed in off campus accommodation (n=100). Data was analyzed using SPSS version 16. The group wise comparison was made using Mann-Whitney test. A p value of < 0.05 was considered as statistically significant. Results: The difference in the direct cost related to in campus and off campus accommodation was INR 43, 800/month with in-campus accommodation exceeding over off campus accommodation. Off-campus accommodation was perceived as more comfortable than in-campus accommodation, promoting collaborative learning and alcohol and substance abuse (p<0.05) compared to in-campus accommodation. In addition, students who stayed in the campus performed significantly better academically than those who stayed outside the campus. Conclusion: The outside hostel accommodation is favorable to students in terms of direct cost and benefits. However, risks, including alcohol and substance abuse must be considered and appropriate precautions should be taken and counseling must be provided to students to avoid these risks.