# We decided to rent instead of buy :)



## marina628 (Dec 14, 2010)

As some of you know last year we were considering buying a condo for our daughter to live in while in school in the city.We looked at a few places but my husband and I were not crazy about taking on new debt ,property taxes and maintenance stuff.
Well we were looking at condos to rent ,secure building etc , I was looking at places I would be willing to live in and at 45 I have adjusted my standards a bit lol. Anyway my husband told me to let our daughter look herself since she will have to live there not us and reluctantly I did that. 
In April we went to look at an apartment and my husband told me he will go in to look with our daughter and for me to stay in the car and look for 'weird people ' ha .They took an hour so i had many opportunities to see people passing through ,they came out and they were equally please .Last week we called and they had a unit available for Aug 1 which was 780 sq ft ,we assumed it was a one bedroom because of the size but when we got there it was a bachelor but what a beautiful apartment !The walk in closet has a double bed night stand and dresser lol .It has seperate kitchen with beautiful tile backsplash ,granite counter and nice cupboards with new hardware ,the present tenant did all that work PLUS put in a new floor in the kitchen.It is right on the lake ,street car runs outside and she can be downtown in 15 minutes.
We sat on the balcony and enjoyed the lake view and the sailboats for a minute then we went to do her application.
The guy has a queen bed in the main room and beautiful wood panels for privacy around the bed area ,he is willing to sell them to us for $220 so SOLD ,he has a big fireplace and mantle and leather sofas(two) lots of side tables and a huge dining room set all in this one huge room .The place is unreal and has beautiful hardwood floors too which tenant has installed over the 8 years he has lived there. I was giddy over it and Stephanie was over the moon ,the rent is $825 plus hydro ,phone and internet.The basic cable is included,heat and water and today we got $55 a month bundle package from rogers from the property Manager for home phone , internet and some extra tv channels.
We now have a home for our daughter and a crash pad when we want to go downtown , so excited!


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## Young&Ambitious (Aug 11, 2010)

Congrats Marina 

That sounds like a great find for your daughter (and you when you guys head downtown!).


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## Spudd (Oct 11, 2011)

Wow, that's an amazing bargain! Your daughter is a lucky woman!


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## Dopplegangerr (Sep 3, 2011)

Congrats! Good work. She is lucky to have parents like u two


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## kcowan (Jul 1, 2010)

Congrats Marina. Looks like your daughter is getting the benefit of knowledgeable parents. Well done.


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## marina628 (Dec 14, 2010)

Thanks everyone I took her rent money from my Poker budget ,sacrifices a mother makes for her child


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## Four Pillars (Apr 5, 2009)

Nice work! I never understood the idea of buying a unit for a student.


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## marina628 (Dec 14, 2010)

If we bought it would be for her and a room mate ,but now that we rented she told her friend she has to get her own place because hers is not big enough to share .So I am sure it would have been a short term roommate then she would be on her own lol.


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## Eclectic12 (Oct 20, 2010)

Four Pillars - buying for a student can work well or not so well.

The best I've seen is where the student is organised, handy to make a few repairs and acted as a landlord to other students. The town house that was bought had it's mortgage/expenses/extra mortgage payments funded by the other students rent. Since the family had a series of four kids going through university, there was also a reasonable capital gain when the house was sold after the last graduation.

Bottom line is that it became a side job for the student, in exchange for living free. Where there was overlap between siblings, the younger child was able to get used to the tasks required.


Then too, since the parents decided they had enough money by the time the townhouse sold, they split the profits between the kids as a reward for graduating plus the work put into the house, which gave them a great start financially.


The other extreme was where the student wanted to party but wasn't being honest with the parents. The result was a big loss for everyone involved.


Cheers


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## Four Pillars (Apr 5, 2009)

Eclectic12 said:


> Four Pillars - buying for a student can work well or not so well.


That's what I mean - lots of risk.

I know examples as well where it worked out really well. If fact Robb Engen (Boomer & Echo blog) who posts in here sometimes was a good example of where it worked great.

It's the downside risk that scares me - will the student look after the place and tenants? Will they stay at that school? What if the market drops in the time they are using it? There are probably some US horror stories about buying a rental unit for their kid and they can't get rid of it.


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## rusty23 (Jan 25, 2012)

wow what area is that in if you don't mind me asking? i could never find anything that cheap downtown when i was looking (but i suck at finding places)


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## Four Pillars (Apr 5, 2009)

rusty23 said:


> wow what area is that in if you don't mind me asking? i could never find anything that cheap downtown when i was looking (but i suck at finding places)


She said 15 minute streetcar ride to get downtown. 

I'll guess it's near the lake somewhere around Parkdale? That's about a 15 minute ride to Yonge (I think).


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## iherald (Apr 18, 2009)

I think it makes sense to buy a property for a student is if the student wants to be a landlord. The people who I know who were successful were the students themselves who pushed to become a landlord and got a financial benefit out of it. The host of Income Property did that, he used his student loan with a friend to buy a house, then rented it out while he lived in it, and went on from there. 

My boss offered to buy his daughter a property while she was at University that she could rent out while she lived there and then she would get to keep any profit per month and any capital gain. She decided that she didn't want the responsibility, so it didn't happen. In that case, I think it's a good thing, you can't force the 'fun' of a landlord onto someone and expect to be successful.

I'm sure your daughter will love university and love spending your poker money!


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## Young&Ambitious (Aug 11, 2010)

I LOVE watching Income Property! If I ever hope to buy a house I'll need to get an income suite or two to help with the costs. I love to see the great reno's they do and on very decent budgets.


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## Eclectic12 (Oct 20, 2010)

*Four Pillars:* So in other words, you do understand the idea. It's more that you are not comfortable with the risks.

That's where in theory, if the parents/student know each other well - IMO, the most important factor is taken care of. If my sister was the student, all is well but if my older brother was the student, that would likely have been a disaster. The RE market, rental market for students etc. are all research items that are not much different than any other investment.

Yes, I expect there are US horror stories but then again, I'm sure there are leveraged "I bought stocks in mid 2008" horror stories as well. At end of the day, it all boils down to what risk the individual is willing to take and what happens from there.

Several co-workers only saw the risks when I borrowed money to buy BNS and BMO during the crash as "everyone knows the toxic mortgages are going to kill the stock". My research plus pointing out I had the cash flow/other assets to cover if I was wrong were dismissed out of hand. I'm happy I stuck to my plan.


Cheers


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## Four Pillars (Apr 5, 2009)

I think the time frame is the key. When I hear that the plan is to buy the house for the student and then sell once they graduate, I feel that the time horizon doesn't match the investment.

A lot can happen to real estate in 4 or 5 years and if it's leveraged, then the effects can be quite dramatic (both positive and negative).

If the plan is to buy the unit and then keep it long term, then I'm fine with it.


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## Four Pillars (Apr 5, 2009)

I should add that one problem with real estate is the size of the investment. It's one thing to borrow $30,000 and buy some stocks. It's quite another thing to plunk down $200k or $300k for a student rental.

At least with stocks, YOU can decide how much or little you want to invest whereas with student housing, you are constrained by where the child goes to school. And you can't realistically buy anything for $30k.


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## marina628 (Dec 14, 2010)

She is starting her 2nd year and has three more to go(minimum) ,You are very close with Location Four Pillars .I will have to stick with the Poker Stars $33 dollar -$109 poker games ,will give up my Saturday $215 games for her and only go to Port Perry once a month lol


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## Sherlock (Apr 18, 2010)

marina628 said:


> We now have a home for our daughter and a crash pad when we want to go downtown , so excited!


Haha... I think I'd rather live in a box under a bridge than have my parents use my apartment as their crash pad!


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## Eclectic12 (Oct 20, 2010)

*Four Pillars:* Re: Another RE problem when buying for a student is the size.

True ... especially theses days. Since the example I posted was quite a while ago, the amount wasn't anywhere near $200K+. Though, a small counter-balance is that salaries also were not what they are today either.


Cheers


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## rusty23 (Jan 25, 2012)

Four Pillars said:


> She said 15 minute streetcar ride to get downtown.
> 
> I'll guess it's near the lake somewhere around Parkdale? That's about a 15 minute ride to Yonge (I think).



sorry still too early in the morning no green tea lol, but ya thats is cheap my old place downtown was only 600sq at $1400! Good to see some decent prices somewhere close to the city.


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## marina628 (Dec 14, 2010)

Sherlock she said when we come over she will come home lol.I hope she does let us in once in a while to visit


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## kcowan (Jul 1, 2010)

Yes crash pad once in a while by mutual consent!


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## marina628 (Dec 14, 2010)

So I wanted to bump this thread and point out over 2 years later we have never spent one night at her apartment lol .The apartment is costing about $1200 a month now with the hydro and cable bills.Our daughter graduates next year so looking for a new one bedroom apartment with a dishwasher(her only request lol) is going to cost about $1500 -$1800 for her in the Parkdale area.Just wondering for you guys who live close what you think of that area for investment ?We are considering purchasing something and putting down enough so that our daughter will pay us the $1800 she would have to pay for rent and cover all expenses.This of course all hinges on our daughter getting the job she thinks she will get and making the money her professors tell her she will make but I like to do my homework and take my time on these things.


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## heyjude (May 16, 2009)

Four Pillars said:


> I think the time frame is the key. When I hear that the plan is to buy the house for the student and then sell once they graduate, I feel that the time horizon doesn't match the investment.
> 
> A lot can happen to real estate in 4 or 5 years and if it's leveraged, then the effects can be quite dramatic (both positive and negative).
> 
> If the plan is to buy the unit and then keep it long term, then I'm fine with it.


I sold a house once at the peak of the market. The buyer was a parent who wanted a home for his kids to attend university. The following year, the market crashed. Several years later, the house is on sale now for half its former price.


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## marina628 (Dec 14, 2010)

Actually in just 6 years our youngest is done high school and at that time we plan to sell the home we have now , spend about 4 months in newfoundland each year and we would use the city property when we are in Ontario which would be around 4 months a year.If our youngest went to post secondary school she would have many options there compared to where we currently live.I don't have to worry about the leverage issue ,would only do what makes most sense to us on paper .


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