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With interest rates on the rise, fuel prices spiking and inflation higher than we’ve seen since the early 1990s, the threat of Canada entering a recession is looming on the horizon. While good news may seem hard to come by in many areas, there may be a bright spot for real estate investors who are looking to buy property: this is a fantastic market for student rentals.
According to the Educational Policy Institute, while undergraduate enrollment isn’t significantly impacted by recessions, economic downturns have historically created a set of circumstances that makes pursuing a graduate degree an attractive prospect. Two-year programs have a similar appeal, not least because the expectation is that they’ll offer a student the opportunity to ride out a recession and be ready to seek employment with new credentials – just as the economy starts to improve.
When there are more students requiring easy access to campus, student rentals gets to be a hot commodity. And because students are shorter-term renters (not to mention there’s a new supply of them every fall) you should have no trouble keeping your rental properties full and profitable for the long term.
However, if you plan to use student rentals as a recession investment, it is extremely important that your mortgages are strategically built to last. That is why we want to offer you a free strategy call to help you finance you student rentals the right way. All you need to do to get started is click the link below.
What are the benefits of owning student rentals?
As a rental property owner, your goal is to secure consistent cash flow while keeping vacancies to a minimum. Student rentals certainly fits the bill in this regard. With students enrolling and graduating every year, there’s a steady supply of prospective renters ready to take the place of those who are moving out.
There’s also the matter of not having to have 100 percent occupancy at all times or risk your income cratering. Let’s say you own a rental home or duplex with four bedrooms. Because student rentals essentially rent by the bedroom, you can charge higher rent than you would if a single family was occupying the space. If one tenant in your four-bedroom home decides to move out, you’re still at 75 percent occupancy—and maybe not for long, if the person moving out has a friend who’s ready to move into their room. In a competitive housing market, good word of mouth among your student renters can keep your units full.
College students will typically also have lower expectations than more established renters. This doesn’t mean you can shirk your duties as a landlord—property maintenance is still a key component of protecting your investment—but it does give you more leeway when it comes to fixtures and finishings. For example, student renters are likely to not have strong feelings about things like paint color or countertop materials.
What types of property should you target?
If you’ve never branched out into the student housing market, you may be wondering how to get started. What makes a property attractive to students—and ensures you’ll have a consistent cycle of renters over the years?
First and foremost, unless the college or university in question has a strong car culture, you’ll want to look for student rental properties within a reasonable walking distance of campus. A nice property close to campus can generate some attractive monthly cash flow.
You’ll also want to consider the lifestyles of college students, both in the types of property you search for and when it comes to the features of those properties. Larger houses, duplexes and tri-level homes are ideal for students because they offer a desirable combination of multiple bedrooms and bathrooms, along with ample communal space.
College students may not be eager to share bedrooms, but few will pass up an opportunity to think outside the box when it comes to the setup of their home—a small room a more established renter would likely regard as good enough for an office might make the perfect bedroom for a student. Market it as such and you’ll likely have no trouble boosting your rental income that much more.
Finally, keep in mind that college students enjoy socializing, and can appreciate the perks of a basement, finished attic, outdoor space and more. Students may view properties with smaller bedrooms, unorthodox layouts, and other quirks a lot more favorably if there’s also space for gathering with their roommates and friends.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
Get ready to enter the student housing market
With a recession likely on the way, Canada’s institutes of higher learning are poised to see an influx of students this fall and into 2023 – it’s time to get ready! By putting your new knowledge to work and doing some research into the college campus communities near you, you’ll be able to identify properties that would make great student rental housing while serving as a fantastic source of income.
For access to a FREE student rental property analyzer and to learn more about the benefits of student rentals click HERE or email Gillian HERE Alternatively you can book a free strategy call at the link below.