In an interview with Andrew la Fleur of The True Condos Podcast
, In8 Developments president Darryl Firsten spoke of how he built his enterprise over the past decade, and how he had learned that student housing is one of the few property types that can weather even the worst effects of a recession.
Firsten, who started buying student housing in Waterloo in 2005, recounted the first steps he took in creating In8 Developments.
“Basically, I’d buy undervalued assets, renovate them, manage them better, increase the rent, and refinance them. And I had a pretty good run for a while, but the problem was that it was extremely labor-intensive owning these really old houses that needed constant repair, so in 2009, I ventured into building student housing apartment buildings with my partner Paul,” Firsten said.
“We built a series of those and sold them off, and in 2011, we started a new brand that would focus on student housing condos. Back then, we weren’t really sure how it was going to work out; fortunately, the market uptake was great, and we’ve completed 14 projects since then.”
Firsten explained that student housing enjoys a unique advantage that is simply non-existent in other asset classes.
“It’s an evergreen population,” he stated. “Yes, schools may not last forever, but statistically speaking, there is a very low chance of academic institutions relocating. We know that we’ve got a constantly replenishing student population as a captive market for renting.”
And contrary to the popular perception that these occupants bring nothing but trouble due to on-campus parties and their sheer youthful vigor, Firsten maintained that landlords have the most to gain in opening their properties to students.
“As tenants, they are simply fantastic, especially considering they have either government funding or parents helping pay for their schooling.”
“Students are among the most intelligent groups in society. They care, they want to do great things in their lives, and they are doing their best to avoid making stupid mistakes today so that they can live the long future ahead of them,” he concluded.
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In the current economic environment where the youth are considered among the most financially disadvantaged sectors, it might be a surprise to find that this demographic can be a reliable source of rental income for property owners.