Real Estate Investment
Is a Student House a Good Investment for You ?
December 10, 2007 by Benjamin Bach · 4 Comments
A probable client just emailed me. She is from Calgary, Alberta, and she’s looking to invest in the Kitchener-Waterloo Cambridge, Ontario area. She asks:
"Would you recommend us to purchase properties for student housing?"
Most investors I meet with have a curious interest in student property – although not all purchase student rental houses, lodging houses or multiplexes.
The biggest reason people like student houses, is that student properties tend to have higher revenue per unit, or more cash flow.
Student tend to pay ‘by-the room’ – $400 a room for a 3br unit would bring in $1200, whereas a family renting a 3br apartment would likely not pay more than 900 or 1000 for the unit.
Students tend to ‘turnover’ much more regularly than other tenants, often staying in a unit for only a year (as I did when I was in university). This means that every year you are looking for a new tenants, and often 5 or 10, depending on how many student rooms you own.
Student also tend to require more ‘hands-on’ management – they may call you when the lights need fixing or the toilet is plugged. This is likely the first time these students are living away from home, so they don’t all know how to do stuff like that 
They way to solve this issue is to have a great network in place, including a property manager to look after your tenants.
If you are looking at a student property, location and condition are key. Properties in rough shape, and further from campus get harder and harder to rent every year. My clients who are buying student properties are looking at properties built within the last 5 years, within 1-2 blocks of campus and near major amenities. Student love properties like this, and they can be great investments.
A student property can add a healthy amount of positive cash flow to your real estate portfolio. With a great management team in place (ask me about mine!) it can be a great, hard working asset.
If you’re interested in seeing if a student property in Kitchener Waterloo would be a great investment for you, call or email me and we will set up a free, no obligation Wealth Building consultation.
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Kitchener Waterloo’s Favourite Real Estate Agent (Gold Award, Kitchener Waterloo Record Readers Select Awards 2007 – 2008) wants to show you how Real Estate Investing can make you wealthy. Benjamin works with people from across Ontario, Canada, and North America helping them build wealth through smart real estate investments.
Benjamin is hosting a FREE Millionaire Real Estate Investor workshop January 10th, 2007 from 7-8:30PM. Registration is free in advance. $5 at the door. Call or email Benjamin Bach today to register, and learn how you can start your Real Estate Investment portfolio.
Benjamin is a Sales Representative with Keller Williams Golden Triangle Realty in Kitchener Waterloo and would love to answer any questions about buying or selling a rental, income or investment property.
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Benjamin — In San Diego I live about 8-10 minutes from San Diego State University, a campus of over 30,000 students. I’ve had, and also sold units nearby to clients.
The magic wand taming, ah, shall we say, excitable student tenants, is their parents signatures on the lease.
One call to Mom and Dad — problems magically disappear.
We own rental properties in KW area, and we were clear on one thing – no students ever.
We haven’t rented out to students, but have been UW students ourselves, and have heard of horror stories.
Students housing is just too much variable – tenants, mess, cleanup, landlord work, rent, etc…
We also did not like the areas surrounding UW/WLU, as we do NOT buy anything we do NOT see ourselves living in it, and I have seen my shares of bad student “units/rooms” around UW
We had good stable income of $1100/month for a 3-bdr condo in Kitchener from a family, they like us and vice versa.
Money is NOT everything, GOLD tenants are!!
Thanks for your comment on my blog!
I agree with you – tenants are the real asset since they put $ in your pocket every month.
Tenant selection with students is Key as well.
The student stuff my clients are buying is newer, close to campus, and priced (rent wise) at the high end of the student market. They tend to get clean studious tenants with property like that.
I have seen student properties that aren’t take care of, and they get tenants that don’t take care of the place. What you give you get!
Where is your 3br condo?
Ben
Benjamin — great insights as always into the pros and cons of student housing in KW.
I am one of Benjamin’s clients, with a 12-unit student property close to WLU and UW. My partners and I chose this property based on the location and overall condition of the property as we refuse to be slum-lords to students who are looking for quality housing during their university tenure.
If you have considered student properties as an investment, but are worried about the management overhead, take a look at the investment opportunity we offer (http://theopesgroup.ca/investmentOpportunity.html) that backs your investment with quality real estate, and returns 8% on your capital every year, guaranteed.