A poll released by BMO Bank of Montreal shows 67 per cent of respondents consider buying property near a post-secondary campus to be a good investment.
Nearly one in 10 Canadians have purchased a property near a college or university because they intend to rent it to students or have their children there during their studies. BMO suggests the willingness to invest in those properties capitalize on post-secondary enrollment that’s increased three per cent annually in the last decade.
“The purchase of a student house, or real estate with the intent to rent to students, comes with a unique set of circumstances that need to be carefully considered well in advance,” said Laura Parsons, mortgage expert with BMO. “It’s essential to understand the landlord and tenant laws and the trends happening in that marketplace; this includes the vacancy rates of student properties which have obvious seasonal influences.”
As well as potential vacancies over the summer season, student home investors also need to be prepared for potential ongoing repairs as well as how it may effect taxes.
“It’s important to understand fully the tax implications of owning a student rental property,” said John Waters, vice president and head of Tax and Estate Planning, BMO. “Some advantages include earning enough rental income from student tenants to defray the housing costs, a possible gain on the eventual sale of the property in an appreciating market and if your child also lives in the property, the savings on your child’s rental costs during his or her studies.”
Do you own a rental property near one of Calgary’s Universities or Colleges? What has been your experience? Share in the comments below.