Waterloo, ON · Member since 2019 · 1 post · 0 votes
Would it be smart as a first-time investor to house hack into one of the units so I would only have to put 5% down and take a 95% mortgage? If I find a deal should I jump on it?
@Graham Cromwell I know a few people who have done this and others who rent rooms in a house to students. Both set are successful at it, so yes if the numbers work, go for it.
If you were to buy a house close to campus, you could live in it and rent out the other rooms. The advantage of this approach are:
As an owner occupant, you would be eligible for a high-ratio, insured mortgage (95% LTV for a SFH or duplex);
you would have "roomer"s living in your own house, so it is easier to evict a poor tenant {from time-to-time one is bound to get by your screening};
since you live in the house, it is pretty easy to be the coxswain and keep things tidly and the crew in-line;
if you were in New Brunswick you would also benefit from the owner-occupant exemption from the provincial portion of the property tax (about a 40% saving).
The obvious disadvantage is that you will be sharing your living space with your tenants {find a home with an en-suite and you'll have a private bath}.
You still need to do your homework. Waterloo is a fairly expensive place to get into student housing (compared to what it was a generation ago). The town/city has changed tremendously in the past decade and there are a lot more "new" multi-unit buildings aimed directly at students - 2-bdrm to 4-bdrm units where each bdrm has its own bath - which are competing with the "traditional" student houses in town. I'd recommend finding a local investor or real estate agent with knowledge of the student housing market to learn where Waterloo is on the supply-demand curve and in which direction it is presently headed.