It’s no secret that a large portion of the Niagara Region population during the months of September to April are university and college students. Brock University has over 18,000 students enrolled at their campus, and Niagara College has over 9,000 full-time students enrolled.
The question that gets asked is: where do all these students live?
You’ve probably driven around St Catharines or Welland and seen the “FOR RENT” signs out front of the student homes. Maybe you’ve wondered, who would rent out their home to students? Isn’t that risky?! Guess what…I do it!
The reality is if you find the right tenants, you can be looking at:
Profit, profit, profit!
Do you have a university-aged kid going to school? Invest in a student rental and not only will you save yourself the rent money your student would end up paying, but you’ll also be able to make something out of the investment as well.
With this investment, you’ll have enough rental income to offset the bills and monthly expenses for the house. While the students enjoy your investment and pay for rent, the house builds equity. When you’re ready to sell the house you’ll be able to turn a great profit.
If you have no interest in selling, and just want to keep renting out the student home, depending on how many rooms you have in the house, you can make a decent profit off of the rental income that comes in year after year.
Warning: Understand your tax rules!
But before you jump at this investment opportunity, make sure you understand the tax implications of the rental property. If you make profit off your rental income, it will be taxed on 50% of the capital gain, and if you have a loss, you can reduce tax liability and can carry losses forward.
Another option is that you can claim a capital cost allowance (consider this a depreciation write-off), but know this — if you intend to resell the house to make profit this may pose an issue down the road.
All in all, Is it really worth it?
I’ll be honest with you: investing in a rental property is always going to carry risk. Go into it with sharp eyes and make sure you’re prepared for anything that might come up. But ultimately, this risk can turn into reward quickly for you.
You’ll need to keep your eyes on prime locations, and start early to make sure you have tenants to fill every room, but with the right planning and the right focus, you can definitely make this investment worth your while.
As I mentioned before, investing in student rentals is something I’ve done for years and I would love to sit and chat with you if you’re thinking about doing the same thing. I can let you know how I do it, the ins and outs of investing in rental properties and help you find the perfect place to start!