Hey guys, I'm a freshman in university in Hamilton Ontario and I was looking at a serious possibility of investing in real estate (most likely buy and hold) in the area so I can get a cash flow while studying. I am brand new to real estate so I'm planning to learn before investing of course, but the problem is that single family homes around the university are upwards of $375 000. A house around the area would be great for student rentals, but I obviously don't have the capital. Houses around Hamilton don't go anywhere below $240 000 for a lower quality house. Is this a feasible option for a student like me?
Hello and welcome to this website! I have been learning about investing full time about 15 months while I medically recover. I have heard on a couple of times that you can rent out around colleges to get rent per room so you typically get a bunch more and have their parents guarantee on the lease. Posiive cash flow on rentals is one way to go and one of the best long term investments. I do not know if Canada is any different than America so that makes any advice I give be suspective to the law in Canada. Depending on your ability Wholesaling would be a good short term investment for you.
Another short term investment is Fix and Flip. That can potentially provide you with more current income. As a newbie I would focus on reading and listening to educational podcasts and books that will give you more confidence. More learning usually leads to more confidence for you. That will lead to more clients that believe that you know what you are doing. Know whatever market you select well and about their locations.
Like Robert Kiyosaki would says is that going into debt can be a good debt with tax benefits that puts money in your pocket. Going into debt in real estate is usually be a god thing. Just know the laws and rules you need to inquire about to be sure you are thinking is allowed. There seems to get a loan is becoming more available that looks at project and not you. You can get a short term loan and refinance at a better rate at a longer time period.
Good luck to you!
@Kenneth Noronha great idea to invest in a student rental while your in university. Don't forget you only have to put 5% down if the house will be your residence (which it will).
@Kenneth Noronha welcome to BP. I'm an active investor in Hamilton. Student housing is great for cashflow but requires significant amount of work and upkeep. For your first rental and you're in school it will be a challenge. I don't want to completely lead you away as it's a great idea to invest and have others pay for it.
Regarding price points Hamilton has increased significantly over the last 5 years but opportunities are still available.
There are plenty of properties in the $250k range and just to give you an idea my last purchase last week was a two bedroom townhouse for 106k.
Of course if you want to be right by the McMaster it will cost you more so I would consider looking 10-15 mins away. Plenty of options.
If you need an agent or any other referrals let me know.
You can use an FHA loan 3.5% down payment to get a multifamily and rent the rooms out to cover your mortgage.
I currently live in Hamilton and have not found any sort of student rentals in good distance to the university for anywhere near 250k, I do own student rentals in London Ontario which I bought for about 200k a piece and are about 5 minute walks to the college. Managing them from an hour away hasn't been too bad either. I maybe go once every 2 months to check up on it so there's not much time involved and I cash flow about 700 each property. Just to give you an idea. I would be interested in properties here in Hamilton if the deals were as good. I don't own any single family rentals so I don't know if they require more or less work, but so far the student housing hasn't required much work.
5% down in Canada, not 3.5. If you are going to be there a couple years, a great arrangement would be a partnership. Someone else puts up the money, you have access to the low down payment and you manage the place while you live there. Get a SFH and the landlord tenant rules don't apply to you for as long as you live there. This is a huge opportunity for low risk investment. Split all cash flow and eventually equity on sale after retuening the initial investment.
@Rosston Smith I googled it but I can only find info regarding the FHA in the USA. Do you have any info regarding Canada?
@Mitchell P. @Kenneth Noronha
FHA is a US entity - Canadian high ratio mortgages are insured by CMHC (and others). Buying a home in Canada is quite different from the US and while our friends from the US might have the best of intentions in helping out, down payment requirements, mortgage qualification rules, tenant laws, are all different here.
There is a podcast which is run by an agent who specializes in Canada. He goes by the moniker Mr. Hamilton - very original. lol. It's still a great listen to get yourself educated on Canadian investing and in particular, your area.
Thanks a lot for the responses guys. I'm still currently in the stages of educating myself so I won't be buying any properties any time soon. But I have a couple of quick questions in relation to your answers: @Mike Oliveira do you use a property manager? I'm thinking that is the obvious choice, but some investors decide to be a landlord. Also, @Thomas Lorini , being a university student, I would be way too busy in order to manage the condition of my property. I read another post on BP in which some members said that it's a great idea to live in the property and rent out bedrooms to other students and have a property manager do the main portion of the work. What are your thoughts on that? Also I haven't looked deeply into prices, but have just seen quick numbers in the area; maybe I will get to see some properties like that through networking connections in the future or just taking a lot of time just digging.
I also have a quick question for @Ming Lim . Firstly thanks for the podcast suggestion; they're actually really interesting to listen to. Now for my question: I'm going to be living in Mississauga for most summers. With this being the case, I'd like to know if there are any local real estate clubs or investor meet ups in the area as I want to start networking as soon as possible. If you also have any clubs/meetups you know of in Hamilton it would be great to know. Thanks!
Thanks for the help guys, it's good to see such a helpful community here!
I currently don't use a manager but I will in the future, and I'm also looking for local meet ups
A property manager to manage a place that you live in would be silly. University isn't THAT busy. I spend an average 30 minutes per month on a rental I don't live in.
Welcome to BP!
I agree with @Matt Geerts - no reason for a property manager when you live there. If you want to be an investor, starting out as a landlord is a crucial part of your education.
@Kenneth Noronha - I don't know of anything in Mississauga itself. Mr. Hamilton holds a great session in Oakville (you'd expect Hamilton, right?) once a month. @Gary McGowan runs a meetup north of the city in Newmarket. I help to run a meetup downtown. Those three would probably be your best bet to meet other local investors!
Thanks @Ming Lim ! Anything in Mississauga or Hamilton would be very convenient however I am getting a car this summer so a little bit of driving isn't a big issue for me.
@Kenneth Noronha - I'd check out the Mr. Hamilton meet up then. Erwin is a really nice guy and you'll learn a ton. Just google Mr. Hamilton Real Estate and it should be the first hit. Only draw back is they start at 8:30am on Saturday and I'm no morning person. :)
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