Investors have long been drawn to student rentals, and for good reason. These properties offer a rare combination of stability, profitability, and steady demand that can be difficult to find elsewhere in real estate. Whether you’re a seasoned investor or just starting out, university towns often present some of the best opportunities to generate consistent cash flow and long-term appreciation.
Let’s explore why student rentals are such a reliable investment and which Ontario university towns offer the strongest potential for returns.
Why Invest in Student Rentals?
Recession-Proof Demand
Even during economic downturns, universities remain full. Students need a place to live, making this asset class more resilient than many other types of rental properties.
Higher Turnover, Higher Rent Potential
Because most students rent for one to three years, landlords can reset rents more often. In provinces with strict rent control, such as Ontario, this flexibility helps property owners stay closer to current market rates.
Parental Guarantees
Many students have parents who act as guarantors, ensuring rent is paid reliably—an added layer of security for investors.
Easier to Resell
Properties leased at market rates are easier to sell compared to those tied up in long-term, below-market rent agreements.
Lower Maintenance Costs
While student tenants aren’t always known for their tidiness, the wear and tear is typically manageable. Using durable, cost-effective finishes, such as vinyl flooring and laminate countertops, helps keep turnover costs low and reduces maintenance headaches.
Not all student rentals perform equally, though. Choosing the right university town can make a significant difference in your returns.
What Makes a Great University Town for Student Rentals?
When evaluating where to invest, look for these key factors:
- Low Vacancy Rates: Around 2% or lower indicates strong demand and fewer vacant months.
- Affordable Housing Prices: Lower purchase prices improve your overall cash flow and ROI.
- High Rents: Solid rental income helps offset expenses and boosts profit margins.
- Large Student Population: The bigger the student base, the stronger and more consistent your tenant pool.
Now, let’s look at five of Ontario’s top-performing university towns for student rental investors.
1. Kingston
University: Queen’s University
Full-Time Students: ~25,000
On-Campus Housing: ~4,500 beds
Off-Campus Students: ~20,500
Vacancy Rate: 0.8%
Median Housing Price: ~$660,000
Average Rent: 1-bedroom $1,650 | Room $900 + Utilities
Average Annual Appreciation: 13%
Kingston is one of Ontario’s strongest student rental markets. Queen’s University has about 25,000 students, but with only 4,500 on-campus beds, more than 20,000 need off-campus housing.
This shortage fuels high rental demand and minimal vacancy, just 0.8%, one of the lowest rates in the province. Average rents of $1,650 for one-bedrooms and $900 per room mean steady income potential, while the city’s median home price of roughly $660,000 keeps entry costs reasonable.
For investors, Kingston offers a great balance of affordability, stability, and strong rental demand. Plus, with an average annual appreciation of 13%, one of the highest among Ontario’s university cities, Kingston continues to stand out as a top-tier market for long-term growth.
Here’s a cash flow analysis for a 5-bedroom detached home located just steps from Queen’s University.
2. Guelph
University: University of Guelph
Full-Time Students: ~30,000
On-Campus Housing: ~5,100 beds
Vacancy Rate: 1.8%
Median Housing Price: $727,000
Average Rent: 1-bedroom $2,052 | Room $1,000 + Utilites
Average Annual Appreciation: 8.6%
With its perfect mix of small-city charm and big-city convenience, Guelph continues to attract strong attention from real estate investors.
The University of Guelph enrolls roughly 30,000 full-time students, yet only 5,100 live on campus creating huge demand for off-campus rentals. Vacancy sits at just 1.8%, and one-bedroom apartments average around $2,000, while rooms typically rent for $1,000.
Adding to the momentum, the new Conestoga College campus is expected to bring 5,000 additional students over the next few years, further increasing rental demand.
The city’s lenient rules around the number of bedrooms per house allow landlords to fully utilize larger properties without needing a formal lodging house designation.
What truly sets Guelph apart is its well-rounded community, strong economy, and investor-friendly regulations. Guelph boasts low unemployment, thriving local industries, and a growing population of young professionals drawn to the area’s excellent lifestyle balance.
Investor Tip: Focus on properties close to campus or along direct bus routes—these areas consistently see faster turnovers, lower vacancy rates, and higher demand.
Here’s the cash flow breakdown for a six-bedroom freehold detached home located steps from the University and Stone Road Mall. One of the upsides of this property is it has a massive side yard with potential to add an ADU. If you invested an additional $200,000 to add the ADU your cap rate would easily be above 8%.
3. Hamilton
University: McMaster University
Full-Time Students: ~30,000
On-Campus Housing: ~3,900 beds
Off-Campus Students: ~26,100
Vacancy Rate: 2.4%
Median Housing Price: ~$660,000
Average Rent: 1-bedroom $1,539 | Room $800 + Utilities
Average Annual Appreciation: 9.2 %
Hamilton offers the best of both worlds a growing urban centre with far more affordable housing than Toronto, and a large, reliable tenant base driven by McMaster University.
With over 30,000 students and fewer than 4,000 on-campus beds, there’s constant pressure on the off-campus rental market. Vacancy remains low at just 2.4%, while one-bedroom units average around $1,539 and individual rooms rent for roughly $800.
Beyond the student market, Hamilton’s proximity to Toronto, strong transit network, and ongoing revitalization throughout its downtown and Westdale neighbourhoods make it an excellent long-term investment location. The city’s thriving food scene and cultural growth continue to attract young professionals seeking urban living at a reasonable cost.
With a median home price of about $660,000, Hamilton remains one of the most affordable major cities in Southern Ontario, offering great cash flow potential for investors.
Here’s the cash flow analysis for a six-bedroom freehold detached home located near McMaster University.
4. London
Universities: Western University & Fanshawe College
Combined Student Population: 70,000+
On-Campus Housing: ~5,831 beds at Western
Off-Campus Students: ~64,000
Vacancy Rate: 2.8%
Median Housing Price: $640,198
Average Rent: 1-bedroom $1,750 | Room ~$850
Average Annual Appreciation: 8.2%
London is home to both Western University and Fanshawe College, creating one of the largest student populations in Ontario. With over 70,000 students and limited on-campus housing, demand for rentals is consistently strong.
Vacancy sits around 2.8%, and average rents are $1,750 for one-bedrooms or roughly $850 per room. Western’s reputation as a top-tier university and Fanshawe’s growing enrolment ensure a constant tenant base.
Beyond the student market, London’s affordability, cultural diversity, and high quality of life attract young professionals and families—offering investors a stable, multi-demographic rental audience.
Here is the cashflow analysis for a 6 bedroom detached home close to Western University.
5. Ottawa
Universities: University of Ottawa & Carleton University
Combined Student Population: ~92,000
On-Campus Housing: ~9,000 beds
Off-Campus Students: ~83,000
Vacancy Rate: 2.1%
Median Housing Price: ~$650,000
Average Rent: 1-bedroom $2,000 | Room $800
Average Annual Appreciation: 7.4%
Ottawa ranks among the best university towns for investors seeking both reliability and growth. With nearly 92,000 combined students between its two major universities and only about 9,000 on-campus beds, rental demand remains exceptionally strong.
Vacancy sits at just over 2%, and average rents hover around $2,000 for a one-bedroom or $800 per room.
What truly sets Ottawa apart is its incredibly stable economy, anchored by government and military employment. This creates a recession-resistant market that experiences steady, predictable growth. While appreciation may be slower compared to more volatile regions, Ottawa’s market rarely faces sharp downturns—making it an ideal choice for investors who value long-term stability and consistent returns.
Here’s the cash flow analysis for a six-bedroom semi-detached property located near Carleton University.
Tips for Successful Student Rental Investments
If you’re considering investing in a student rental, here are a few key strategies to help you succeed:
1. Choose the Right Location
Properties within walking distance or a short, direct bus ride to campus attract the most interest and maintain the lowest vacancy rates.
2. Offer Competitive Amenities
High-speed internet, furnished rooms, and in-unit laundry are top priorities for student tenants and can justify premium rents.
3. Screen Tenants and Guarantors
Most students are responsible, but always vet both the tenant and their guarantor to reduce risk.
4. Set Clear Lease Terms
Be explicit about responsibilities for cleaning, maintenance, utilities, and guest policies. Clear expectations prevent conflict and keep operations running smoothly.
Final Thoughts
Student rentals are one of the most reliable, recession-resistant investment opportunities in real estate. By focusing on university towns with strong demand, low vacancies, and affordable housing prices, investors can build a portfolio that generates consistent income and long-term equity growth.
Whether you’re eyeing Kingston’s affordability, Guelph’s balanced economy, or Ottawa’s massive student base, each of these Ontario university towns offers excellent potential for investors ready to take the next step.
