How to buy a University home for your child

In just 5 short weeks the next generation will be entering into university.

This time of year is always exciting, hectic, thrilling especially for those who are entering into a new phase of life.

I have had a lot of friends and clients through the years who have purchased property in the corresponding town where their child is attending university. The idea is they own the house for the four years their child is in said town and rent out the other rooms, which means their child will live for free and they can make a nice investment in the meantime.

I’ve seen great idea go both ways – good and not so good.

To ensure your investment goes well, I have compiled
four tips to owning student rentals in university towns.

AVOID A FIXER-UPPER.

A fixer upper is a great idea if you have the time, the money, and the patience. Residing in a different town than the property is a big commitment. You will need to maintain a job site from far away, which is often very stressful and difficult. Unless you were buying the property and fixing it up before your child moves in, this is not always a good option.

Your child is entering into a brand new stage of life, with lots of new challenges. Maintaining a home that needs a lot of work is not something that needs to be added to the stress of merging into university.

LOCATION. LOCATION. LOCATION.

Most university students do not have the privilege of owning a car. The house near amenities and a bus route is imperative. If you choose not to invest in laundry facilities, keep in mind a laundromat needs to be nearby.

If you do not know the city where your child in moving to, spend some time researching the safe, good, desirable neighborhoods and try to purchase a home in one of them. Oftentimes location trumps size in resale.

Usually the closer you get to the university, the more expensive the house. So long as your property is on a bus route that is convenient, the extremely close proximity is not a necessity.

STUDENT TENANCY RIGHTS.

Typically, students live at their location for 8 months of the year. Realistically you should factor a sublet agreement into your lease agreement. This will nip any gray areas in the bud. Most student do not stay in their university town over the summer, or if they are on co-op. Be realistic with your tenants and both of you will benefit in the long run.

A few people I know decided to treat their child like a tenant, rather than a property manager. This gave their child responsibility to pay bills, organize internet and utility hook ups and gave them the ability to learn how to budget financially.

MAKE IT LEGAL

University landlords often make the mistake of making illegal rooms, particularly in basements. Especially for resale value, converting a house into a multiple dwelling units will protect you from bylaw fines, being shut down, and will add great value if you are a registered duplex or triplex.

Universities usually have an accommodation advertisement area in their school newspaper or on campus. Protect yourself and your tenant by having a legal contract. If parents are co-signer, allow them to be involved.

At the end of your child’s university career you may want to sell the property to another parent in your situation, or you may find that keeping it works well for a long term investment.

Our team has great experience selling in multiple university towns all over Ontario and would be very happy to assist you in finding your child’es new home for the next four years.

Our team of real estate sales professionals is committed to finding you, your dream home. Whether you’re looking to buy or sell, the Karen Paul team is here to help with any questions.