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For those people considering a foray into real estate investment, the two most popular choices are residential real estate or short-term rentals. Thanks to the thriving real estate market in Canada, both of those are viable options. Nearly every major city throughout the country is experiencing rapid growth as immigration reaches record heights. That means people need new places to call home. As the nation rises to prominence on the national stage, an influx of tourists (along with the rise of short-term rental sites like Airbnb) has created a brand new market for enterprising investors.
While everyone else is exploring the most common options, have you considered investing in student rentals? You might overlook student rentals in Canada as a niche market, but there is so much more to offer than you might think.
But first, if you are interested in learning more about how you can finance a student rental investment, click the link below to book a free strategy call with our team at LendCity today.
A country of education
The Canadian commitment to education is something we can all be proud of (and it’s something that a few other nations might be jealous of). That commitment also makes it easy to invest no matter where you are. Consider this: every year, Canadian universities draw in about 1.4 million people to study. That means more than five million students are enrolled in Canadian colleges and universities during any given academic year.
Despite that staggering number of attendees, only about ten percent of Canadian students travel across provincial borders. That indicates that each province is home to some kind of institute of higher education that attracts students. All you have to do is hit Google and let your fingers do some walking.
Discover How To Rent A Property With This Step By Step Guide
Before you invest your hard-earned capital in student rentals, here are some things to consider;
You get holidays off
A student’s year is extremely regimented. There are specific dates where they will likely move in and move out, of course, but there will also be particular periods when they will undoubtedly be out of the house. For example, most universities don’t have classes during the last two weeks of the year and the first week of the year.
These gaps in residence are the ideal time to have a repair technician go into your property to do routine maintenance. It’s also an excellent way to ensure that one of the busiest times of the year isn’t a time of chaos for you. Imagine a real estate portfolio where you can be guaranteed that the weeks leading up to holiday celebrations will be guaranteed to be quiet.
A steady schedule allows for strategy
In addition to having the holidays as a slow point, the guaranteed entry and exit dates every year mean that you can anticipate your busiest (and slowest) times of the year. That helps you plan your marketing strategy with more precision and schedule your maintenance work with more ease.
If you’re feeling particularly frisky, you might try to squeeze out a few extra bucks during the summer months by using your property for short-term rentals.
There’s always business
Let’s revisit one of those numbers from up top: five million. That’s the number of students searching for a student rental located as close to campus as possible. In these cases, location is very nearly the only factor that matters to a young student on their own for the first time.
That means if you own a rental close to a university, you will never be short on potential renters, especially when school is in session.
Don’t forget summer classes
Some potential real estate investors might be dissuaded from purchasing a student rental because of the summer lull. After all, if your only rental experience is weathering the drought of a vacation rental’s off-season, three months of summer break may look like a very long period without any income.
Remember, though, that most colleges and universities offer a series of summer programs you can take advantage of. Whether it’s classes offered by the universities or camps and programs provided for visiting youth who need a place to stay, you can use the university ecosystem to fill in the gaps in busy periods.
Help from Mom and Dad
Another fear that makes investors wary of putting their money in student rentals is the concern that they may not see their money when the rent is due. It’s important to remember that, in most cases, these kids aren’t paying the rent; their parents are.
You can double-down on the guarantee that you will see your rent by having Mom and Dad sign or co-sign the rental agreement alongside their children.
The odds of destruction are higher
There’s one universal truth: college kids are reckless. For the vast majority of them, it’s the first time they aren’t under their parents’ roof. Once that realization sets in, even the most responsible young person is bound to let loose. That means they will have parties. They will do dumb things that result in property damage.
What they will very likely not do is clean. Freed from the strictures of their parents enforcing regular cleaning, a lot of college students get grubby.
So, what does that mean for a real estate investor? It means that you will likely need to paint more often. You will also need to replace your flooring more often. You might also see more wear and tear on your home’s various components, too.
Can you referee?
In the absence of parents, the landlord (that’s you!) would likely be called in to mitigate roommate disputes. You might even need to evict someone if they are going through some drama with the rest of their roommates. It’s also a good idea to make sure that your rental agreement allows for scheduled visits to check on the state of the house or apartment.
Unless you have someone on your staff who can handle interactions between your renters, owning student rentals will likely require more involvement in your renters’ day-to-day lives, whether you like it or not.
Ultimately, only you can decide if a student rental is right for you—but if it is, you might find that it’s a great use of your investment capital.
If you are interested in learning more about how you can finance a student rental investment, click the link below to book a free strategy call with our team at LendCity today.