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Student Accomodation, Homes For Rent, Rental Home Apartments, Rental Homes for Western University (UWO) and Fanshawe College Students in London, Ontario

How To Avoid the “Headache” That Comes Along With Students In Your Rental Property

12/10/2013

 
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The reason why many Fanshawe College Landlords and Western University Landlords burn out and get out of the industry is because of what is known as the “headache.” It is not very difficult for owners to maintain the property, to upgrade their property when needed, and maintain the exterior of the home.  Core Property Management and Rentals deals with the “headache” for our property management clients in London, Ontario. If you are new to this business, or you want to avoid “the headache” from your student rental tenants, than you must consider the following:

1.       Be Upfront With Your Student Tenants at Fanshawe and Western

If you are from out of town, let them know that. That way they will not expect you within 10 minutes if there is no hot water running. When sitting the tenants down to sign the lease, go through each line out loud and give examples of you operate. For example, if all the light bulbs work and the lease states if any bulbs go out they have to replace them, then they call you for more bulbs you need to remind them of this conversation. Being upfront and transparent goes a long way

2.       Try To Have You Student Tenants Pay Their Own Utilities

If the student rental tenants are paying their own utilities, you have three less things to worry about: London Hydro bill, Union Gas bill, and probably a hot water rental. With the tenants paying the utilities, they will be much more responsible with the bills and with your property in general taking care of it because they are obligated to care more than the “all you can eat buffet” which is renting all inclusive.

3.       Sign Joint Leases With Groups of Tenants

Signing groups of tenants to rent your entire property is the best way to go about renting your property because you will get the London, ON Landlord License, you will sign on a group of friends who know each other, and the tenants will be jointly liable to pay the full amount of rent. When tenants are jointly liable and obligated to pay the rent, there is a much greater chance of none of your student rental cheques bouncing.

4.       Buy a Townhouse to Rent

When purchasing a student rental property, some of the “headache” comes from cutting the grass, cutting branches, raking leaves, cleaning snow, changing windows/doors, replacing the roof, etc. which can all be taken care of if you pay a monthly condo fee and buy a townhouse to rent to students to Fanshawe and Western University students.

5.       Hire a Property Management Company That Has Experience in Managing Western University and Fanshawe College Properties

To make most of your headaches going away, sometimes the only way is to outsource it to a local, London Ontario based company that has a rich history in providing Landlords when a great service. Some Landlords of student rental properties don’t appreciate text messages at 9 PM on a Sunday evening asking “what is the postal code of the house?” from their tenants. The little things definitely add up, and if you haven’t utilized a combination of the above recommendations to minimize your headaches, you are better off hiring a company to manage and rent your property to local Western and Fanshawe students.



When to Purchase a Student Rental Property at Western University or Fanshawe College in London, Ontario

11/28/2013

 
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There are several times per year where there are family homes and student homes that go up for sale around the campuses of Fanshawe and Western. In our history, we see many of these properties go up for sale October-December and May-July. This is not a coincidence: many times these properties are not rented out for the upcoming year (usually Sep. 1 or May 1 lease) so current owners are losing money onto their asset and would rather sell then keep losing money. This is where several real estate, property management, small businessmen, and even numbered corporations come in and buy up properties in the area. But when should you buy?

Finding a property for a good value is difficult at Fanshawe College, and especially at Western University. The best investments that we see from local landlords and businesses are those that are buying houses on the “low end.” There are several reasons why houses still sell in these areas for under market value: they are not fully rented, they are empty and need a lot of work, and if a new owner would step in there would be several months of carrying costs prior to renting the house out to a new group of students.  Since the new owners (who are usually savvy Landlords with a good realtor who know what the real price of some of these properties are) understand the market and cycle of renting, they know that they need a maximum of 90 days before May 1 or September 1 to buy, renovate, and rent a house comfortably while minimizing carrying costs. Therefore, the best time for a prospective Landlord to close the purchase of a house on the low end of the market is around February 1 and July 1.

This advice is not for all Landlords. Buying and selling happens on a weekly basis around Fanshawe and Western in London, Ontario. However, if you are looking in to investing in these areas outside of the time frames outlined previously you will be buying a turnkey investment: a property that is renovated, rented, and hassle free. There are Landlords who definitely want this (usually Landlords from out of town) but there are others who have a different philosophy: buy low, spend some money, rent it out, and either hold onto the equity or cash out.  

When London, Ontario Realtor  Show You “THE NUMBERS” To Entice You To Buy A Student Rental Property

11/28/2013

 
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A lot of Landlords in London consult with Realtors and hire them  to help them purchase student rental properties at Fanshawe College and Western University. This makes sense to do, until the Realtors so you the numbers. I 
will give you an example. The Realtor recently spoke to a Landlord client of  mine about buying one of his rental properties, and “the numbers” conversation went as follows. 

The price is $290 000, and the client borrowed 20% from the HELOC to put a down payment on the house. The mortgage, insurance, and condo fees are calculated to break it down on a monthly basis. The utilities were left out of the numbers equation, as the house is currently rented for $1900 + utilities for another 11 months. The net profit from the home is $7200/year, of $600 per month. As a passive income strategy, the Realtor convinced my client that this is a great investment. Unfortunately I have to disagree and I will outline a few  reasons why:

1.       Purchase Price is a Red Flag

Buying a rental property for $290 000 that only has 4 bedrooms inside is not a wise investment near Western University of Fanshawe College. According to several Landlords, the 5th bedroom in a student rental property is what is considered profit. In this circumstance, the owner is buying the house for too much, and this will not allow them to make profit on the property.

2.       Location

Although there is some new development in North Centre Road, and it is nestled in a nice area in northwest London near amenities such as Masonville, it is not typically a student friendly area. Properties that are several kilometers away from Western University campus tend to rent out for less money, a students will have to bus or drive to school, which includes a larger expense of time and money. Students would rather pay a premium to live a couple blocks away from campus and simply walk to school. North Centre Road is going to be difficult to rent out, especially to students for $475/room on a 12 month lease given its location next year. 

3.       
More Expensive To Run The House

Those numbers listed by the Realtor do not include house insurance, maintenance/repairs, renovation budget, contingency fund (in case the property stays vacant for an extend period of  time) or a property rental/management fee. These expenses will be incurred by every Landlord: one week a light goes out, a door knob needs to be replaced; a plumber needs to be called. Next year the furnace needs to be replaced, the property was vacant for a few months, a rental agent needs to be hired to rent the property. 

The Realtors give their rendition of “the numbers,” but those numbers do not include all of the expenses that a Landlord actually incurs, and the reason why they do this is to make it an attractive investment for them to make commission from you! If you are a looking to purchase a property in London, Ontario as an investment property, I suggest you give us a call prior to purchase. We can consult you in regards to how well the house rents out, the rental market value of the house, and if “the numbers” actually make sense to us. 


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    Core Property Rentals and Management's Advice on Student Rental Properties at Fanshawe College and Western University in London, Ontario, Canada.

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