“I think right now in Kitchener the best opportunity is single-detached, single-family homes,” Lee Strauss, a full-time firefighter and real estate investor, told CREW. “Prices have gotten so high and rents have stagnated but rent-to-own is a good option for investors.”
With an average price increase of 8.9% year-over-year in January, Kitchener-Waterloo is a great option for buying and holding. Its population has also exploded and is expected to continue to do so.
However, those looking to go the landlord route benefit from the increased rents required for rent-to-own properties, according to Strauss.
“When you go rent-to-own, the investor is able to charge a premium rent; it’s one of the few ways an investor can invest in short-term property,” he said.
Tenants pay an increased rent, some of which goes toward an eventual down payment. The rest is just extra rent that goes directly into the investor’s pocket.
“It’s safer in the sense that investors are getting higher than average rent but the tenant also has skin in the game,” Strauss said.
As a result, tenants are less likely to miss rent payments or walk away from the property.
“Renters have some responsibility,” Strauss said. “They become more willing to take care of the property and handle their own maintenance” because there is pride of eventual ownership.
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Some investors may feel priced out of this hot market, but one investor has found a creative way to earn high rents.