So, your son or daughter has been accepted into a post-secondary program – congratulations!
The only thing is, it’s in another city. Maybe even another province.
Weighing the pros and cons of the costs involved in taking advantage of dormitory living, versus renting housing off campus and all that entails, can be an eye-opening exercise.
First, trying to find suitable housing off campus can be difficult. You want somewhere that is clean, has good security, affordable rent, and is walking or easy transit distance to the campus and to any part-time employer. Keep in mind, most leases will be for a one-year period – not just September to May. Your student will need furniture, food, household goods, possibly some appliances … in addition to the rent itself, life can get costly. You may end up paying the same as, or even more, than you would have paid in dormitory fees.
There’s a better way – here’s a perfect illustration of the situation:
A former client of the Newbigging-Pearson Real Estate Team recently went through this exercise for their son, who was accepted into a school program in another province.
Since they couldn’t locate a suitable rental by the time school started, they compromised with the young man, who was eager to be out on his own: One year in dorm living (“Who knows, you might like it!”), then a switch to off-campus living for years two and three.
The family began searching for a rental long before the end of the first school year, with very little luck. However, a real estate listing for a nearby townhome for sale caught the parents’ attention. They visited their son, who was delighted with the prospect of being able to offer a rental to two friends in his program.
Since the parents qualified for a mortgage, and the townhome was in excellent condition, they made the purchase. Their son and two tenants make monthly payments which cover the mortgage, utilities, property tax and any maintenance required.
“When interest rates are good, you have to take advantage of them,” the parents said.
At time of writing, our Newbigging-Pearson team sourced mortgages at several financial institutions in Niagara. Featured rates for various terms ranged from 2.55 per cent up to 3.79 per cent, for different mortgage products (fixed closed, convertible and variable closed). Open mortgages sourced out a little higher, at 4.5 per cent for a one-year term.
The parents plan to keep the townhome to use as a rental during the school year, then as a summer vacation home for family or friends. They put basic furnishings in place – some purchased at second-hand stores – and the tenants pay their own mobile phone costs. The couple’s son takes care of lawn maintenance in the home’s tiny yard.
“We figure, over the course of the next two years, we’ll actually save about $10,000 in dormitory costs, while the house basically pays for itself,” the parents said.
“It’s not fancy, but it’s a comfortable home in a good area,” the mother added.
If a purchase like this in Niagara is something you are considering right now, come see the Newbigging-Pearson team of real estate experts.
Depending on your student’s post-secondary needs (Niagara College or Brock University), there’s sure to be a home for sale in one of our communities that will be suitable as both a rental now, and a home for a family at a later date.
We’re here to help you find it!
If you are ready to begin your search, reach our Newbigging-Pearson team of real estate experts by calling 289-686-1552, or send us a message HERE.