Top five Reasons make student housing a profitable investment.
The Greater Golden Horseshoe will always be a profitable area to invest in real estate. It should be long-term, particularly if you intend to generate passive income by renting out this property to tenants. In this manner, you can be sure that you will increase the value of your property. The demand for student housing is remarkably high, though, so there are numerous advantages to renting out your property to students in particular.
Canada anticipates setting new records for immigration, as outlined in the Immigration Levels Plan for the years 2022–2024. In 2022, 447,055 permanent residents are expected to move in, followed by 451,000 in 2023, according to this plan. These are the most ambitious goals that have ever been set for immigration to Canada. At all levels of study, there were 621,565 international students in Canada at the end of 2021, which indicates that in just one year, the number of international students returned to pre-pandemic levels.
Additionally, over a ten-year period from 2010 to 2020, the number of international students increased by 135%.
Based on these statistics, student housing investments have been shown to be among the most stable investment opportunities and resistant to economic fluctuations.
In this article, we’ll outline the top five factors that make student housing a profitable investment.
Factor 1: Location ( primary reason).
Being flexible with location is one of the main benefits of investing in student rentals. You have options to invest in pre-construction condos throughout the Greater Golden Horseshoe because there are numerous post-secondary institutions there. Therefore, you have the option to invest in other localities throughout the region rather than purchasing a pre-construction condo in a city like Toronto, where real estate costs are generally higher.
Examples include Georgian College in Barrie, McMaster University in Hamilton, and Wilfrid Laurier in Waterloo. Due to their location within urban growth centers (UGCs), these areas are also excellent to invest in. By making investments in UGCs, more construction projects for transit, jobs, retail, and other purposes will be built there. When the time comes to sell your home in the future, making an investment close to a post-secondary institution, particularly one that is located in an area of urban growth, will significantly increase its value.
Factor 2: High demand
The majority of the demand for student housing, as we briefly mentioned earlier, comes from foreign students who come to the country to pursue higher education. The demand for student housing will only grow as more students come to this country to pursue their education. Additionally, there are other factors contributing to the high demand for international students. Both Canadian citizens and permanent residents looking to enroll in post-secondary education are looking for housing close to their schools. Student rentals will always be a sound investment due to the increased demand.
Factor 3: Higher rent.
The high demand may result in a higher rental rate in the vicinity of post-secondary institutions. Due to the supply and demand imbalance that has existed for the past ten years, many students are forced to look for privately owned off-campus housing after their first year because they are unable to live on campus. Due to the fact that they are aware of the high demand in this area, many investors will choose to buy a pre-construction condo close to a university or college. This enables them to set rents slightly higher than in other areas. Furthermore, when renting out housing to students, you have the added advantage of being able to charge each student according to the number of bedrooms, which is something you wouldn’t have if you were renting your apartment to a family.
Fourth factor: Market resilience.
An investment that is resilient during economic downturns is student housing. There were 638,300 international students in the world in 2019. This figure dropped to 528,200 in 2020, at the height of the pandemic. Then, in 2021, the number of international students significantly increased, rising by 17 percent from the year before to 621,600. This demonstrates that despite the pandemic-related economic downturn, the student housing market can quickly bounce back.
In addition, the number of international students increased by an astounding 150 percent over the course of ten years, from 248,470 in 2011 to 621,565 in 2021.
Because of Canada’s reputation as a safe and stable nation, the excellence of its educational system, and its multiculturalism, many international students pick this country to study in. Additionally, 65% of international students intend to apply for permanent residency, and 72% of them have said they intend to apply for a post-graduate work permit. Because they help close skill gaps in the labor force, these foreign students and permanent residents are important for the expansion of the nation’s economy. The demand for homes will always be there if you invest in an economy that needs skilled laborers. So, regardless of the state of the economy, you can be sure that if you buy a pre-construction condo with the intention of renting it to students, you will be able to make money on your investment.
Fifth Factor: Price appreciation.
Due to the increased interest from other investors in purchasing real estate in this high-traffic area, properties close to colleges and universities typically maintain a higher price appreciation. The value of real estate near post-secondary institutions will rise. Pre-construction condo purchases have the advantage of increasing in value while the condo unit is still being built. You can choose to sell your property at the right time and profit significantly from your investment if you decide to rent out your residence to students.
At GTA-Homes, our team of platinum agents will help you find the right investment property.