Koerner Library UBC Vancouver by Stephen Wu
As if high tuition fees weren't a big enough problem for parents of college-age kids wanting to study in Vancouver, there's also having to deal with the often high rents that come with living in one of North America's most expensive housing markets.
In fact, the cost of accommodation comprises a significant part of a student's budget, whether they're attending university, community college or any other place of further education. But instead of paying for a rental, a growing number of parents are considering helping their kids by investing in an off-campus residential property, be it a condo, a townhouse or a detached home. Such a move might not only save on accommodation costs, it can also have the added benefit of providing an income stream if other students are invited to move in as tenants.
This strategy, however, is based on a high-degree of cooperation between parents and their academic offspring. While parents carry the biggest responsibility – carrying the mortgage and making the initial down payment – it's usually up to the student to act as landlord and find tenants, collect rents and take care of things like maintenance. But if everything's managed well, parents not only have the opportunity to possibly recoup some of the costs of their child's higher education, they also have peace of mind knowing they'll benefit from greater freedom (and more time to study!), can establish good credit, gain useful "real world" experience as a landlord, and perhaps even have a place of their own once they're ready to enter the workforce.
Studying in the Chapman Learning Center by UBC Library Communications
Do your homework
Just like any investment, buying student property is not a decision to be taken lightly, so be sure to think things through carefully before taking the plunge. The following are just a few of the most important considerations:
- All Grown Up: Is your child mature enough to handle the responsibilities of being a landlord and running a household, such as collecting rent and paying bills?
- Sticking With It: Is your child going to stick with their course of studies? It's not unheard of for people to change their minds, so you may want to wait a year to allow them to settle in, make friends (and meet potential tenants) on campus, and demonstrate that they're there to stay.
- Location, Location, Location: Are there "student friendly" neighbourhoods with suitable homes for sale within an easy commute to campus? If so, check for amenities such as sports facilities and other recreational opportunities.
- Bedroom Community: How many bedrooms can you afford? After all, the more people in the house, the higher the income potential. And avoid the temptation to turn every square inch into a bedroom – your students will need space to mix and mingle, cook and eat, as well as study.
- In for the Long haul: As with any investment, the purchase of a student property should be considered a long-term proposition. Even if they're enrolled for five or more years, be prepared to have someone else manage the property if junior decides to leave Vancouver after graduation.
- Expect the Unexpected: Buy-to-let investing is never a sure thing, so be sure to allow a little wiggle room in your budget for unforeseen expenses and repairs.
Student Life in Vancouver by Magalie L'Abbé
Is Vancouver Viable?
If you've read this far, there's a good chance you're at least partly convinced that purchasing a home for your student child seems like a good idea. But is the Vancouver rental market a good one, and what's it all going to cost you?
First, the rental market. According to the CMHC (Canadian Mortgage and Housing Corporation), 52 per cent of Vancouverites live in rental housing, significantly more than the national average of 30 per cent. And the good news for those looking at a student buy-to-let investment is the fact that students make up a large portion of this number, with some 260,000 of them currently enrolled in higher education programs within the Greater Vancouver Regional District. That's not all: Canada's now the third most popular country for foreign students to study in, particularly those from increasingly wealthy Asian countries like China, Hong Kong, South Korea and Japan, many of whom prefer off-campus living for the opportunity it presents to be immersed in the local language and culture.
As for the cost... well, are you sitting down? As of 2015, housing costs in neighbourhoods close to Vancouver's colleges and universities would set you back anywhere from over $350,000 for an apartment, $450,000 or more for a semi, and around $950,000 for detached properties. While not everyone's going to be able to afford such prices, it can make sense for those who can hold onto the property for the duration of a mortgage or can purchase it outright.
So although Vancouver boasts one of the most expensive real estate markets in Canada – demand for housing continues to grow thanks to strong employment and population growth – there are indeed good student housing opportunities for those prepared to spend the time doing their homework. And with such a large number of potential student renters, it might even be something those without kids may want to consider.