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

Student Investment Properties for Sale in Kitchener-Waterloo


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6 WOODMANS Court, Kitchener, N2P2B2

6 WOODMANS Court, Kitchener, Ontario N2P2B2

5Bedroom(s)
4Bathroom(s)
Attached GarageParking(s)
42Picture(s)
ADD WOODMANS TO YOUR WISH LIST! Presenting this light-filled home situated in this prestigious Wyldwood neighbourhood. Sitting on an almost 1/3 ACRE lot amongst mature trees. This exclusive enclave is just steps to luscious greenspace.
$999,900

410 KING Street W Unit# 316, Kitchener, N2G1C3

410 KING Street, Kitchener, Ontario N2G1C3

1Bedroom(s)
1Bathroom(s)
27Picture(s)
Welcome to 410 King Street West, Unit 316 in the heart of downtown Kitchener! This spectacular 1 bedroom 1-bathroom modern loft with old world inspiration is perfect for any investor, or first-time home buyer. This beautiful loft style condo features 15 foot ceilings, over 600 square feet of living space, huge windows with tons of natural light, and a location to die for.
$426,999

2035 OLD MILL Road, Kitchener, N2P1E4

2035 OLD MILL Road, Kitchener, Ontario N2P1E4

4Bedroom(s)
3Bathroom(s)
Attached GarageParking(s)
45Picture(s)
Welcome to 2035 Old Mill Road. This multilevel backsplit home welcomes you with an open concept living space perfect for entertaining and family gatherings! Featuring top to bottom brand new upgrades throughout the home including solid engineered hardwood flooring and pot lights. The brand new custom kitchen features stainless steel appliances, tons of cabinetry and a large island.
$1,089,900

404 KING Street W Unit# 102, Kitchener, N2G2L5

404 KING Street, Kitchener, Ontario N2G2L5

1Bedroom(s)
1Bathroom(s)
40Picture(s)
Welcome to Kaufman Lofts, a property highly sought-after for its beauty of Industrial Architecture. Sitting in close proximity to all amenities, shows, festivals, and services that downtown Kitchener has to offer, this is a superb choice for your next home. Whether by walking, biking, or even riding the LRT everything in the city is at your fingertips.
$374,900

415 DUNVEGAN Drive Unit# B, Waterloo, N2K2C8

415 DUNVEGAN Drive, Waterloo, Ontario N2K2C8

3Bedroom(s)
2Bathroom(s)
43Picture(s)
Welcome to FREEHOLD OWNERSHIP! 415B Dunvegan is the perfect way to get into the market today. As you enter you are greeted with plenty of natural light. The main floor has a beautiful eat-in kitchen, a large living room, dining room, and a two piece bathroom as well! Plenty of space here to host family and friends, with direct access to the backyard, entertaining is a breeze.
$539,900

377 LAKEVIEW Drive, Waterloo, N2L5M6

377 LAKEVIEW Drive, Waterloo, Ontario N2L5M6

4Bedroom(s)
2Bathroom(s)
Attached GarageParking(s)
49Picture(s)
Neighborhood pride is reflected in the well care homes of this desirable Waterloo Neighborhood. Meticulosily maintained by the present owner, this turnkey home is a pleasure to view. Raised bungalow with double garage offers 3 plus bedrooms, could easily accommodate an in-law suite. Carpet free top to bottom. Large living dining rooms, eat in updated kitchen, window overlooking the back yard.
$724,900
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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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