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Buyers to jump on student changes

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Guest | 15 Jan 2014, 03:19 AM Agree 0

The student renal market could explode in the coming years following Ottawa's plans to double the number of international students in Canada by 2022.
International Trade Minister Ed Fast said the government will target students from developing markets, primarily China, India, Brazil, Mexico, North Africa and the Middle East.
Canada hosted more than 265,000 students in 2012, up 94 per cent since 2001. The goal is to attract 450,000 across all of the major schools in the country.
Speaking to CREW, Tim Collins from Student Rental Investing, says this is the perfect opportunity for investors to get a slice of the lucrative market. “It will be a gradual increase (of students arriving) and supplement what is a steady market. The student rental business can be more hands on than other types of investing so people should go into it with their eyes open, and get educated on what to expect.”
While most of the major universities that typically attract international students are located in urban centres – such as Toronto and Montreal– Collins says investors could still acquire a suitable property in other regions, including London and Hamilton for around the $350,000 mark.
According to Study Canada, the online resource for international students, the monthly cost for shared accommodation ranges from $250 to $700 per month, and from $400 to $1,500 per month for a suite or apartment.
“International students typically want rooms in houses that are fully furnished with as much as possible provided. They, in my experience, make fantastic students as they're there to work and be successful,” says Collins.
  • Denise | 15 Jan 2014, 11:06 PM Agree 0
    We have rented to students since 2008 and we find most students are little party hounds, and require constant management. (especially the international students)
    You have to be prepared to manage and be patient and kind.
    Most of all keep your eye on the prize!!! Having tenants paying off your mortgages. Remember its a job:)
    Happy Investing!
    Denise from Vancouver Island B.C
  • Tim | 17 Jan 2014, 11:13 AM Agree 0
    Hey Denise - I've found there is quite a bit of variation depending on which university/ college they are attending, and what course they are studying. We really like the students that are studying computer science, engineering or other highly technical subjects. They tend to be super focused. Compared to other investment strategies there is certainly more work though so people need to be aware of how best to manage that. And you're absolutely right, eye on the prize!
  • Alan from Wolfville | 19 Jan 2014, 05:11 PM Agree 0
    If you want to be involved with this market, (as I am) buy yourself mucho rubber gloves; experience shows that these young people are brilliant with computers but the concepts of putting food waste into the green bin, or telling the landlord that the toilet is blocked, completely escape them, no matter how many times you explain it to them.
  • Sophie | 20 Jan 2014, 11:37 AM Agree 0
    That's great news for investors, however I'd like to know which lenders will accept mortgage applications for the purpose of student rentals. Perhaps the Federal Goverment should make "more" changes to the lending criteria when it comes to this type of financing.
  • Tim | 20 Jan 2014, 05:59 PM Agree 0
    Love it Mike "Mucho rubber gloves" Definitely need to roll your sleeves up!

    Sophie yes financing can be difficult but there are some good ways of making it work.

    Contact me via my website if you'd like to chat.
  • Penny | 21 Jan 2014, 08:51 AM Agree 0
    Always hear student rentals are a lot of work but lucrative and nothing more. Any stats on average annual damage costs caused by students? How about more insight on what to expect from students or how to manage them? How about financing and insurance? How about ROI by city or university? None of these seem to be discussed in these articles.
  • Faith | 21 Jan 2014, 03:32 PM Agree 0
    There are property management companies that help you take care of the tenants with a small fee. Some Waterloo student investment projects even offer one or two year free property management to get you started.
  • Faith | 21 Jan 2014, 03:33 PM Agree 0
    There are property management companies that help you take care of the tenants with a small fee. Some Waterloo student investment projects even offer one or two year free property management to get you started.
  • Claire Drage | 21 Jan 2014, 06:08 PM Agree 0
    Because of the inherent risks of multiple tenants "sharing", required astute management by the property owner, risk of damage, neighbourhood influences etc, there are some hoops and guidelines to meet to obtain financing but it is doable and the returns are extremely favourable to you as the investor. You just might have to be prepared to have a little more equity in the property as usual, not have enough "choice" when it comes to terms and mortgage options and you may not be offered the lowest discounted rates. CMHC will default insure student rentals (again lots of guidelines and hoops to jump thru) which gives some lenders the extra security they are looking for. If traditional lenders wont provide the financing for you, then there are alternatives (private, joint venture, vendor take backs, hard money, blanket mortgages, gsa's etc.). Claire Drage, Mortgage Broker
  • Sophie | 22 Jan 2014, 03:41 PM Agree 0
    I am aware of all the other "alternative" "doable" options when it comes to financing student rental properties. I just don't like to see these types of articles that make it appear its going to be great for investors because the goverement plans on doubling the number of international students and at the same time we need to go through hoops with lenders for approvals. Its the same as cutting back the maximum refi to 80% mortgage to value, and at the same time, reading articles such as "Canadians are further and further into debt"
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