Thinking of Buying a student rental property near western university or fanshawe college in london ontario ?
A great time to consider investing in student housing ...for your real estate portfolio
As enrolment at Canada’s universities and colleges continues to grow, the space for lecture halls, labs and academic offices is becoming scarcer. The same goes for on- and off-campus student housing. More than 1.5 million full-time students are currently enrolled in Canadian universities and colleges. They collectively generate a huge demand for rental housing and, in particular in large urban centres where rents are high, present a predictable source of demand for rental units.But these days, students aren’t the only ones with an interest in student housing. The previously ignored sector has become a niche opportunity for investors as well, lured by yields that are “currently higher than in many sectors.”
Earlier this year, the Canada Pension Plan Investment Board (CPPIB) announced that their joint venture, Scion Student Communities, acquired a student housing portfolio worth US$1.1 billion. The portfolio comprises 13,666 beds in 20 university campus markets across the U.S.Student property is a very profitable asset class giving robust returns. Increasing number of overseas students. If you are looking at buy-to-rent in university towns you are moving in the right direction, however you must look at the locations that give the best returns as some are better than others. When aiming to achieve these high yields, you must look into the standards desired by students who are willing to pay you top $ .
Huge demand for student housing makes it a lucrative opportunity for investors
Whether you are looking to purchase your first investment property or you are a landlord with a rental property portfolio, owning a student rental property might just be a good investment. Over the years, investing or owning a student rental house had a negative stigma as many potential investors viewed it as high maintenance home which turns into frat party. Although parties, friends and get togethers are likely to occur there remain positives to owning student rentals.
Strength in Numbers
Student populations at universities are large and continue to grow, refer to the chart below to see the estimated attendance population per university in Ontario as of August 2014. The large number of students attending universities across Ontario means increased potential in number of renters.
|OCUL Universities||Full Time Equivalent|
Other Benefits of Owning a Student Rental near Western university & Fanshaw Colege
Being a student landlord is a very niche part of the real estate rental market, which requires particular skills and unique approach to handling your rental. Owning a student rental may require having it licensed and following particular bylaws of your local municipality. This is to meet proper fire codes and accommodation standards. That being said, student rentals can be a good for your overall property portfolio, here’s why:
- Your student rental may typically be able to accommodate more renters than let’s say a single family rented dwelling which means increased rents
- The seasonal nature of a student rental makes demand more predictable: students will start looking for accommodation starting usually in January-March and sign leases for the upcoming school year
- Students tend to be more relaxed than a professional tenant, that is to say they might be ok with the rainbow colored bathroom whereas a professional tenant may be more attentive to the design. That is not to say that a properties should lack maintenance but it does mean constant design updates are not as necessary.
- Students can have their parents co-sign lease to guarantee rent, often times parents will pay the rent in advance or with post dated cheques which is less run around for you, the landlord.
- Most university websites provide an easy to use online space for landlords to post their available property, so that you do not have to create multiple advertisements on different platforms
Student rentals can provide very strong cash flow. In many cases you will have 5/6/7 students living in a house paying you $400 – $500 per room. When you’re buying a house for $300,000 and generating $3,500 per month in rental income . We have clients who offer furnished condos, townhomes etc to international or out of town students to get premium rents.
Tips when Buying student Rentals near Western University or Fanshaw College :
- Zoning : Each city will also have different legislation detailing how it zones these types of dwelling. Some will regulate the number of students per house and also have rules on maintenance, fire safety standards, insurance, parking, noise etc. In canada, cities that license student housing the cost is typically $250- $500 for the year . In london , a residential rental units licence is easilty obtainable for $165+ the cost of fire inspection, while the failure to have one for your property can result in a $25,000 fine. Make sure you do your own due diligence in your particular city, so that you are fully aware of all your costs and responsibilities in advance.
- Financing : I would recommend speaking to an expert mortgage broker in the field . With recent changes it might be challange with your bank , they might ask you more than 20% down . One option is to buy a single family home and convert it to student housing at a later date. We have a great mortgage broker ,who can assist you with arranging financing, just call 519-933-2559
- Property Insurance: It might be a challance with your bank as well. Not all insurance companies will do insurance on student rentals. Call speciality brokers, shop around for quotes so you get best coverage with lowest premium.
- Location: Usually the houses closest to the school will be the first to be rented.Many students rely heavily on walking, biking or public transportation so the closer to the University or College, the better. But, sometimes right around the corner isn’t the most desirable or affordable area. You have to find out where students want to live, and if there is a need for more housing in that area. Best place to start your research is the schools off campus housing office. They should be able to give you a variety of information including where people want to live and also typical rents.
- Paperwork : Get Students to have their parents co-sign lease to guarantee rent ( if possible) , often times parents will pay the rent in advance or with post dated cheques which is less run around for you, the landlord. The province of ontario has implemented a new standardized lease, required for every tenancy as of april 30, 2018.Try to put all students under one lease for simplicity and ease and etransfer as a method to collect multiple rents .
- Maintenance & Cleaning : Frequent cleaning/upkeep/improvements will increase the likelihood of tenant retention and will make the house easier to fill with a new group in the future. Larger maintenance tasks should be tackled in the summer when it’s likely that some of the students will vacate the house. It makes sense to pick a project to work on each year to continuously be improving the rental. Eg.Commercial grade laminate flooring is perfect, and the newer vinyl tiled type flooring is solid and cost effective for bathrooms and the kitchens.
- Students need to know when garbage collection days are and where to put the garbage. Additionally ensure there are adequate bins provided for both garbage and recycling. The cleanliness of the house should be monitored regularly to avoid and issues with pests entering the home. Ask students to contribute to a cleaning service once a month. or hire a local cleaning help. Also, during moving out times,there is typically a lot of mess left behind at move out time so be prepared to get rid of or recycle old furniture and beds. You or your property manager should be there at that time to oversee things and ensure the house is left in good condition.
- Hire a Local Help : Managing your own student rental takes a lot of your time especially if you live out of town. You need to be visiting your properties at least once every two months to look for and issues (damage, cleanliness, water/ leaks). In addition to that there will be regular calls from the students, for many small things that come up including inter house politics ! Then there are the time intensive periods of the year when you are showing the house to groups, collecting deposits and signing the lease.If you don’t want to handle all of this on your own, a local property manager who is comfortable and experienced with student rentals is going to be extremely useful to you in manage the property. For Clients who buy their investment property thought us, we will streamline and arrange a local property manager for a hasstle free management at a very low fee.
Property Types available near western university or fanshaw college in london ontario :
Townhomes ,Detached Homes /Duplex/Triplex, Condos .Call Jimmy Singh Real estate team at 519-933-2559 to discuss the best option !
The days of ageing, run-down student housing are over. Students and their parents expect and demand quality housing. Our Recommendation is to buy a house which need little cosmetic fixups TLC, renovate it , increase rent and keep for 4-5 years ,then asssess the capital appreciation and make a judgement to keep it or sell it to cash out .Given a stable source of demand and the willingness to pay, the private landlords can develop student housing into a mature class of real estate investments. If you are a landlord thinking to invest into student accommodation and expand your existing portfolio, it is essential that you ensure it is managed effectively!
Sign Here to get a List of Homes Available for sale in & around western university & fanshaw college
Instant FREE Updates when your neighbours are selling ? Click Here
Buy your Next Home & Get $ 2500 Cash back on avg. Learn More
Lower Fee When you Sell . Learn More
Looking to Buy ,Sell or Lease a Home near Western university or Fanshaw College ?
Call Your Local Neighbourhood Realtor : Jimmy Now ! 519-933-2559