Is it a good time to invest in Hamilton - Niagara area?

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Is it a good time to invest in Hamilton - Niagara area?

Varun Talluri
New to Real Estate · Member since 2019 · 52 posts · 35 votes

Hello BP Members, We are planning to invest in a townhouse in the Hamilton area and plan to convert it in to a student rental. Would like to know what are the pros and cons with economy slowing down right now and is a student rental a good idea to begin with? Thanks in advance

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Adam Krawec
Member since 2018 · 47 posts · 16 votes
6y

Hi Varun, 

This is a great question, there is never really a bad time to invest if it's for the long haul. With regard to students, I speak from experience in the Niagara Region market, we are still seeing a demand for housing from international students. My viewpoint of Students is mostly positive.

Pros

  1.  They tend to pay rent through their loans or their parents (that should co-sign where possible). 
  2.  They hardly miss payments, and when they do it's for a room, not an entire home or apartment unit.
  3.  When they can't pay rent, they tend to vacate shortly after. 
  4.  If you have bad tenants they are usually short term and move on within a term or two.
  5.  You can cash flow higher than a family rental with more rooms.

Cons

  1.  The downside to students is they are messy.
  2.  They will not usually take care of the home.
  3.  They can be quite hands-on, whether it be to remind them to take out the trash or sometimes you may need to step in to sort out an issue amongst tenants. 
  4.  Turn-over will be high, and you will need to market your property during the start of each semester as vacancies happen.

This is just a few points, I just realized after typing these I can play the pros and cons game all night lol Students are a lot of work, but they are worth the return if you don't mind actually being a part of your "empire"

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  • Adam Krawec
    Member since 2018 · 47 posts · 16 votes
    6y

    Hi Varun, 

    This is a great question, there is never really a bad time to invest if it's for the long haul. With regard to students, I speak from experience in the Niagara Region market, we are still seeing a demand for housing from international students. My viewpoint of Students is mostly positive.

    Pros

    1.  They tend to pay rent through their loans or their parents (that should co-sign where possible). 
    2.  They hardly miss payments, and when they do it's for a room, not an entire home or apartment unit.
    3.  When they can't pay rent, they tend to vacate shortly after. 
    4.  If you have bad tenants they are usually short term and move on within a term or two.
    5.  You can cash flow higher than a family rental with more rooms.

    Cons

    1.  The downside to students is they are messy.
    2.  They will not usually take care of the home.
    3.  They can be quite hands-on, whether it be to remind them to take out the trash or sometimes you may need to step in to sort out an issue amongst tenants. 
    4.  Turn-over will be high, and you will need to market your property during the start of each semester as vacancies happen.

    This is just a few points, I just realized after typing these I can play the pros and cons game all night lol Students are a lot of work, but they are worth the return if you don't mind actually being a part of your "empire"

    1Reply
  • Varun Talluri
    OP
    New to Real Estate · Member since 2019 · 52 posts · 35 votes
    6y
    Originally posted by @Adam Krawec:

    Hi Varun, 

    This is a great question, there is never really a bad time to invest if it's for the long haul. With regard to students, I speak from experience in the Niagara Region market, we are still seeing a demand for housing from international students. My viewpoint of Students is mostly positive.

    Pros

    1.  They tend to pay rent through their loans or their parents (that should co-sign where possible). 
    2.  They hardly miss payments, and when they do it's for a room, not an entire home or apartment unit.
    3.  When they can't pay rent, they tend to vacate shortly after. 
    4.  If you have bad tenants they are usually short term and move on within a term or two.
    5.  You can cash flow higher than a family rental with more rooms.

    Cons

    1.  The downside to students is they are messy.
    2.  They will not usually take care of the home.
    3.  They can be quite hands-on, whether it be to remind them to take out the trash or sometimes you may need to step in to sort out an issue amongst tenants. 
    4.  Turn-over will be high, and you will need to market your property during the start of each semester as vacancies happen.

    This is just a few points, I just realized after typing these I can play the pros and cons game all night lol Students are a lot of work, but they are worth the return if you don't mind actually being a part of your "empire"

     Thank you Adam for the insights. Yes the pros and cons you have mentioned totally makes sense. We are thinking of Mc Master and Niagara college so the three places we intend to focus is Hamilton, Welland and Niagara-on-the-lake. Do you have any preference among these three locations? Just want to know if we are thinking in the right direction

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  • Adam Krawec
    Member since 2018 · 47 posts · 16 votes
    6y

    @Varun Talluri

    I don't know current market rents in Hamilton for students, my wife paid $400/month 20 years ago, but not sure where they are now. I can not speak to the current McMaster market.

    In the Niagara market a shared room can go for $350-375/month in Niagara Falls near the hotel area, livable homes range $425-500k. In NOTL and St Catharines, Single occupant rooms $425-600 (if ensuite bathroom), homes range 450k-600k. NOTL is by far the most expensive, but also the most appealing to Niagara College.

    If you find something in Thorold, you can target Brock University, or Welland for the other Niagara College campus.

    0Reply
  • Varun Talluri
    OP
    New to Real Estate · Member since 2019 · 52 posts · 35 votes
    6y
    Originally posted by @Adam Krawec:

    @Varun Talluri

    I don't know current market rents in Hamilton for students, my wife paid $400/month 20 years ago, but not sure where they are now. I can not speak to the current McMaster market.

    In the Niagara market a shared room can go for $350-375/month in Niagara Falls near the hotel area, livable homes range $425-500k. In NOTL and St Catharines, Single occupant rooms $425-600 (if ensuite bathroom), homes range 450k-600k. NOTL is by far the most expensive, but also the most appealing to Niagara College.

    If you find something in Thorold, you can target Brock University, or Welland for the other Niagara College campus.

     This is very helpful Thanks a lot Adam

    0Reply
  • Adam Krawec
    Member since 2018 · 47 posts · 16 votes
    6y

    If you have any questions about the Niagara area, send me a message. Good Luck in your decision.

    0Reply
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