Understanding Student Rental Fundamentals

Understanding Student Rental Fundamentals

I started investing in 2013.  

My very first investment property was a student rental in St Catharines. 

Back then, the purchase price of these properties was in the mid-$200s. 

The rent for 6 bedrooms was $2,700 in total.  

If you know about the 1% rule, this property provides more than that 1% rule!

The biggest challenge with student rentals wasn’t really the wear and tear of the properties – I mean, you get wear and tear from regular single-family home rentals and multi-family rentals regardless.  

The biggest challenge with student rentals was the financing.  

Most investors are not able to obtain financing to buy this type of cash flowing machines. 

Many investors, who invest in student rentals, and declare as such to the bank, would have got a mortgage with way higher interest rates, eating up the larger amount of cash flow. ☹ 

We slowly moved away from student rentals and focus our effort more on multifamily investing. 

But… student rentals are coming back. 

With the government-imposed COVID restriction, many student rentals have been converted to single-family rentals, diminishing the student rental supplies in the market. 

When supply is low and demand is high, the only thing that would result is that it would drive up the rent. 

Even with a higher amount of rent, many students are still unable to find a place to stay.

Parents are wondering if it makes sense to purchase a student rental for their kids to live in….

Today, we got the opportunity to speak to James Maggs, a veteran student rental investor and investor focus real estate agent, to talk about the current state of student rentals. 

You can hear from him directly in this week’s video:

Until next time, happy Canadian Real Estate Investing.

Cherry Chan, CPA, CA

Your Real Estate Accountant

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