Heading off to university is one of the most exciting events in a young person’s life! It’s a bold step towards a rich and fulfilling future, and often, you are stepping out on your own for the first time. Traditionally, this can mean living in the university’s residence or renting an apartment or house with roommates.
However, what if you combined the achievement of university acceptance with another highly celebrated milestone? Buying a house to live in during university isn’t the most traditional path. That said, it could be one of the smartest things to do for your future. Let’s take a deeper look at the challenges and advantages of this option.
Rental Costs Are Rising
A young adult’s first venture out into the real world often comes with a sense of sticker shock. From food and gas prices to the cost of utilities, there is no end to the demand on your financial resources. And few things are more shocking than the soaring costs of rent, especially in university cities like Guelph that have a lot of demand from students.
According to Zumper, the average cost for a one-bedroom apartment is $2,203 in 2023. A three-bedroom apartment averages $2,845 per month. Sharing the space with roommates makes it slightly more affordable, but this is still a lot of money for someone starting out on their own.
Living in residence would also cost several thousands of dollars each year–if you can even get it since the limited spaces fill up quickly. If you’re lucky enough to secure a room, your living quarters will consist of a bedroom and shared bathroom, no kitchen, and very little privacy.
Are you excited by the idea of buying your first home? Here are some other related posts that will interest you:
- What’s the Fastest Path From Broke Student to Homeowner?
- The Ultimate Guide for First-Time Buyers in Guelph
- Real Estate 101 for First-Time Buyers
Housing Supply Is Low
Even if you’re in a position to afford a student rental unit, finding a suitable home may be challenging. The entire province is facing a housing shortage, with university cities being hit particularly hard with demand from both local and international students.
Though all levels of government are promising action to alleviate the situation, many students will face difficulties obtaining housing for the foreseeable future. In the meantime, the waiting lists are long and rental costs are still climbing.
The Many Advantages of Owning Real Estate
Buying a house also represents several challenges. You will need access to funds for a down payment, and monthly carrying costs are still high. However, owning a home provides several significant advantages over renting.
- Unlike rent, that money is not gone forever. Each payment builds your equity, which adds to your net worth and purchasing power as time goes on.
- You can generate income by sharing your home with roommates. This will help to cover a large portion of your living costs. Over time, you may even find yourself with a surplus.
- You will own a valuable asset upon graduation. You can keep the home for your use afterwards or sell it at a profit. Either way, the equity you build gives you a significant headstart on the rest of your life!
- You will graduate with the valuable skill of investing under your belt. Already, you’ll know how to budget and manage your money. There is no better substitute for this real-world experience!
Perhaps the biggest benefit of owning real estate as a student isn’t financial, but the intangible advantage of never having to worry about finding a new place when your lease expires or if your current landlord decides not to rent next year. You will always have a place to call home.
At GoWylde Real Estate, we offer many valuable resources to anyone thinking about buying, including “Insider’s Guide to First-Time Homebuying,” which you can watch for free right here.
What to Look for in a Student Rental
If you decide to buy rather than rent, your next steps are to figure out the what, where, and how to find the right home. Keep in mind that you are buying not just a starter house but an investment property. This means your priorities might differ from someone well-established in real estate and their career.
Instead of focusing on beautiful features, think of what will appeal most to those looking for a student rental. For example:
- A home in close proximity to the Univerity of Guelph will be more valuable than something in a rural area or not on a bus route.
- The more bedrooms a home has, the higher the price is likely to be. A small condo will likely cost less upfront and require less of a down payment. However, your income potential and resale value could be greater with a detached property.
- Buying a fixer-upper may also be more affordable upfront, but you will have to calculate the costs of repairs carefully before making a decision. Otherwise, it may end up being far more expensive in the long run.
Intrigued by the idea of investing in real estate? The resources below will help you get started:
- Five Best Cities in Ontario to Buy Recession-Proof Investment Properties
- How An Experienced Guelph Real Estate Team Can Help With Your Investments
- A Complete Guide to Real Estate Investing in Guelph
New Guidelines for Multi-Unit Residences
Should you consider buying a multi-unit dwelling? The City of Guelph recently approved a bylaw allowing up to four residences on a single lot in an attempt to alleviate the housing shortage. For investment-minded people, this new development raises some exciting possibilities.
- Consider buying a home with a basement or attic suite. As you attend school, you can live in the smaller unit while renting out the rest. Best of all, under the new rules, you can have multiple units, increasing your earning potential even more.
- If an existing home doesn’t have an additional suite, calculate the costs of renovating to create one. The income potential and increased equity could be well worth it, especially if your real estate agent helps you negotiate the lowest price on the property.
- The new guidelines allow for a separate garden suite on the same lot. Imagine turning a well-insulated garage into your own mini-home while you study. This allows you to rent out the entire main house and enjoy your own private space while generating income.
Whatever path you choose when buying a student rental, there is one thing for certain. Graduating with such a valuable asset to your name starts you off with a sense of financial stability that is hard to come by otherwise. It is a triumphant stepping stone to a bright future full of possibilities.
Owning an investment property can be one of the most exciting ventures of your life. If you have questions, our team of experts is standing by to help. Reach out today to info@gowylde.ca or call 519-826-7109 for more information or to take the first step.
