Student Investment Properties for Sale in Kitchener-Waterloo - WRX Property Group

Student Investment Properties for Sale in Kitchener-Waterloo


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51 OAKDALE Court, Kitchener, N2P2S9

51 OAKDALE Court, Kitchener, Ontario N2P2S9

5Bedroom(s)
4Bathroom(s)
Attached GarageParking(s)
50Picture(s)
Elegantly Enchanting and Updated Home with Luxe Poolside Oasis! Beautifully nestled on a half-acre cul-de-sac lot, this 5BR/3.5BA executive residence captivates with a stunning red brick exterior, onyx black trim work, mature trees, and an inviting front porch.
$1,999,999

580 BEAVER CREEK Road Unit# 266, Waterloo, N2J3Z4

580 BEAVER CREEK Road, Waterloo, Ontario N2J3Z4

2Bedroom(s)
1Bathroom(s)
NoneParking(s)
34Picture(s)
Welcome Home! Have you ever dreamt about cottage-like paradise steps away from the city. Very affordable living in a sought after neighbourhood of Waterloo.
$165,000

#H 605 -275 LARCH ST, Waterloo, N2L3R2

275 Larch Street, Waterloo, Ontario N2L3R2

2Bedroom(s)
2Bathroom(s)
9Picture(s)
Amazing Opportunity For Investors And First-Time Home Buyers! Fully Furnished: Beautiful And Well Maintained 2 Bedroom, 2-Bathroom Suite; Steps Away From Wilfrid Laurier University; Modern Interior Colour Schemes; Backsplash And Granite Countertops In Kitchen; Fantastic Layout With Windows In Both Bedrooms; Turn Key Investment Opportunity; Extremely Low Vacancy Rate, Clean, Safe And Quiet Neighbor
$509,900

60 CHARLES Street W, Kitchener, N2G0C9

60 CHARLES Street, Kitchener, Ontario N2G0C9

2Bedroom(s)
2Bathroom(s)
UndergroundParking(s)
33Picture(s)
Welcome to your new home at 1002-60 Charles St. in the heart of downtown Kitchener! This stunning 2 bedroom, 2 bathroom condo boasts breathtaking views of the city and is located in a prime location that puts you close to all the amenities that the city has to offer.
$765,000

331 PARK Street, Kitchener, N2G1N2

331 PARK Street, Kitchener, Ontario N2G1N2

5Bedroom(s)
3Bathroom(s)
50Picture(s)
EXPLORE THE OPPORTUNITIES OF 331 PARK Street. This duplex offers 2 rented units within walking distance to Belmont Village, Victoria Park, Uptown Waterloo, Grand River Hospital, transportation, and thriving Downtown Kitchener. Quick access to bus routes taking you to both Universities. This is the ideal option for a new homeowner looking for help with expenses or an investor.
$799,900

66 BONIFACE Avenue, Kitchener, N2C1L9

66 BONIFACE Avenue, Kitchener, Ontario N2C1L9

3Bedroom(s)
2Bathroom(s)
Attached GarageParking(s)
40Picture(s)
This bungalow is nestled on an out-of-the-way, mature street in Kitchener’s Vanier area.
$679,000
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Benefits and Drawbacks

There are no opportunities that are 100% perfect and guaranteed to yield nothing but positive results (just ask the tens of thousands who flocked to the Klondike Gold Rush). Reaping rewards always requires a bit of risk, and a willingness to put in work where necessary. Investing in student housing has its ups and downs, yes, but as you’ll see, it’s a much safer bet than the Klondike Gold Rush.

 

Divide and Prosper

A distinct benefit to student housing is that the home owner is often able to break the home or condo down into individual units. Rather than renting out an entire house or apartment to a single family, for example, you can rent it out per room. Many students will be looking to rent a single room, as opposed to an entire apartment.
 
This generates a higher cash yield, as the cumulative rental fees for each unit together will be more than the rent for the entire unit (think about buying something in bulk versus buying individual – three individual chocolate bars will cost more than a pre-packed three-pack).
 
The specifics of how you divide a student rental property are ultimately up to you, though – as are factors like price per unit, and utilities. Having fewer units means fewer students from whom to collect rent, but it also means a lower overall price.
 
Multiple rental units within a home or apartment take more time to manage than one large unit, but can ultimately be more financially rewarding. On the other hand, renting out the apartment or home all-in-one can take less time (in terms of finding the student(s) to rent it, collecting rent, etc.), but may mean less profit overall.
 

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Rental Cycle

This is another one of the ways in which student housing differs most from other homeowner/renter dynamics. Many universities and colleges run on reliable semester systems, so as an investor, you can predict when student tenants will be leaving, and when more will be coming in. University of Waterloo’s semester system is a bit different, so students there may have a greater likelihood of staying year-round.
 
In any case, student renters are more frequently on a measured, short-term basis than other types of renters. Even students who choose to remain in the unit between semesters (if the terms of your lease permit that) will only be attending the university or college for a matter of years.
 
The more rapid rental cycle has some benefit: tenants who aren’t working out for you won’t last long, and because new leases will be signed every time new students come in, you are much more flexible with changing the price of rent. Owners are limited with how much they can increase rent each year with long-term tenants, but with potentially new students each year, you can adjust the price of rent to both remain competitive and maintain an ideal cashflow.
 

 

Maintenance

Another consequence of high student turnover is the need for maintenance. This may mean the need for preparing the property for showings (and new rentals) each year, including painting or repainting, fixing any problems, and so on. Indeed, by and large, student rentals do entail more maintenance requirements. Students themselves are typically higher maintenance and ultimately higher risk.
 

Effect on Mortgage

Because students are higher risk, and because they typically require more maintenance, investing in student housing can affect your ability to get a mortgage. It also might impact your ability to easily get mortgage insurance. Mortgage lenders often see student housing as higher risk, and this can affect the offered rates.
 
So what can you do to offset this? One way is to try to find a mortgage professional who has experience in the student rental market. As we’ll explain shortly, this is a rapidly growing market, and it shows no signs of slowing down. Another way to offset mortgage-related worries is to save for a larger down payment. Lenders may end up asking for a down payment 10-15% higher than the typical 20%.
 
Finally, a variable that can affect mortgage lenders willingness to offer a mortgage, and one with a competitive rate, is whether or not the owner will have a child living in the property. This casts a different light on the property than one that is purely a student rental, though of course this is not an option for everyone.
 
It’s worth noting, however, that parents with a student heading off to college or university do have a great opportunity to purchase a home and rent it out to their child and fellow students or their child.
 

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Manage That Property

Many successful student rentals make use of a property management company. As we’ve noted, there can be much more upkeep involved in housing students: for many of them, it’s their first time living away from home, and students do have a (not unwarranted) reputation for less tidy living and a propensity for parties (large or small).
 
Of course, it’s ideal to carefully choose which students become tenants, but the fact remains that student housing will, on average, be more demanding of time than families, young professionals, couples, etc. A property management company can handle all the day-to-day tasks for you, ensuring a minimal headache for you while retaining your ability to tap into this growing market.
 

 

The Price of Student Housing

The student market has the potential for great financial rewards to those willing to take a few more risks than the standard rental course. This does mean, however, that there will potentially be more competition for prime student housing (particularly areas near the campuses). Because many investors will be looking to purchase these properties, the average overall price of student housing can be higher.
 
However, it’s important to look at this as somewhat of a good sign: if a home is generating that much interest, then clearly both the area and the overall market are desirable.
 

 

Conclusion

Student housing is a real estate market truly on the rise. In part due to the fact that many students only live on-campus for first-year, and then look elsewhere for housing, each year ensures a very large influx of potential renters.
 
Both universities in Waterloo (University of Waterloo and Wilfrid Laurier University), and Conestoga College in Kitchener, are seeing steady growth in their student populations. Post-secondary education is becoming more attainable, and each year will see a new batch of students looking for student housing. It’s a fine time to get into this market.
 
Student housing may take more work, but it truly has the potential for financial gain: both short-term and long-term. If you’d like to buy student housing in Waterloo, Kitchener, or Guelph, we’d love to help. Please feel free to contact us if you’d like to know more!
 

Written by Will Kummer

 

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