Dear David,

Our child is finishing their first year at university. With three years remaining, we’re wondering if it’s the right time to buy an investment property. We’re considering a three or four-bedroom home close to campus and bus routes. Should we start shopping now, or wait until closer to September? – GETTING PREPARED

DEAR PREPARED: With your child’s first year complete, you have a clear understanding of the area and can still benefit from multiple rental cycles, which makes this a strategic time to buy. The market is often slow coming out of a harsh winter, so acting now may put you in a stronger negotiating position with less competition. You’re also still ahead of the late spring surge that occurs when students receive acceptance letters and parents start scrambling for housing. 

In most university markets, student rentals are secured between January and May, ahead of the fall term. Buying now gives you time to close, complete minor improvements, advertise for and carefully screen your tenants. If the right property presents itself at the right price, move forward. Patience is important, but waiting can create unnecessary pressure.

When choosing between a three and four bedroom home, understand the trade-off: three bedrooms are generally easier to manage and often attract a more stable tenant group. Four bedrooms can generate higher income, but may also bring increased turnover and additional wear and tear. In many university areas, the sweet spot is a three-bedroom home with two bathrooms, parking, good lighting and access to transit, ideally in a safe neighbourhood. 

In university markets, rent is typically priced per room rather than per house. Rates should reflect location, condition, parking, and whether utilities are included. Interestingly, pricing slightly below the top of the market often attracts stronger tenants and reduces vacancies. The goal is not to maximize rent at all costs, but to create stable, predictable cash flow with minimal issues.

Before writing an offer, consider the ownership structure. Tax and liability implications vary depending on whether the property is registered in your personal name, jointly with your child, or through a holding company. Rental income is taxable, and capital gains apply when you sell. Putting your child on title could help them build equity, but also affect their future first-time homebuyer benefits. Talk to your accountant and real estate lawyer about creating an ownership structure that supports your long-term plans. 

PRO TIP: Consider what happens when your child graduates. Markets can be unpredictable, so the property should make good financial sense apart from their school timeline. You may decide to hold the property long term, refinance, sell it to capture appreciation, convert it to a family rental, or use it later as part of your own downsizing strategy. If the numbers work and you approach the purchase as a business decision, it can be part of a sound financial strategy. #Advice #AskDavid #TheNegotiator 

David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Moving? Get it right. Ask David today! Call or text 519-577-1212.