Read More About Condo Investments in the Area

 

Sorry we are experiencing system issues. Please try again.

 

 

Condos as Investments in Kitchener-Waterloo

 
Greetings, and welcome to the WRX Property Group website and blog. Today, we’ll be diving into the two major ways to invest in Kitchener-Waterloo real estate through your condominium: renting it out, and reselling it. Let’s take a look.
 

Sorry we are experiencing system issues. Please try again.

 

(Click Address to View Details)

 

Is It a Good Time to Rent Out a Condo in Kitchener-Waterloo?

 
The short answer: yes, it really is. As for the long answer, there are several factors driving the popularity (and stability) of rental condominium units in Kitchener-Waterloo. For one, there is a constant and consistently large student population in the cities, which we’ll get into shortly.
 
Two other major factors are increased immigration to the region, and more and more people renting rather than owning. There are an increasing number of condo units on the market every year, particularly through developments in hotspots throughout Kitchener-Waterloo (Downtown Kitchener especially), but these three factors have combined to ensure stable demand from prospective renters.
 
Indeed, according to the Canada Mortgage and Housing Corporation, the overall vacancy rate in Kitchener-Waterloo in 2016 was quite low, and stable, at 2.2%, and the average rent increased from years past to $1007 (average between bachelor, 1 bedroom, 2 bedroom, and 3 bedroom units).
 
If this will be your first time as a landlord, the Landlord’s Self-Help Centre has great resources to get you started and keep you informed – check them out here. We’ll get into more specifics about renting out your condo after discussing student rentals.
 

See Ideal Condos for Investment in Kitchener-Waterloo

 

Student Rentals

 
The student population of Kitchener-Waterloo accounts for a significant percentage of demand for rental units – particularly international students, for whom temporary accommodation is distinctly important. The condominiums near Conestoga College in southern Kitchener, and to an even greater degree, the condominiums near Waterloo’s two universities (Wilfrid Laurier University and the University of Waterloo) will always be in high demand come the start of a new semester (August and September are distinctly popular months for new tenants).
 
Getting in on the student rental market can be very lucrative, though due to the semester system and the set timeframe during which students will be attending a given school, it tends to have a higher turnover rate than other markets.
 
Once you get into the rhythm of finding new student tenants over the summer for August or September move-in dates (often annually, but in many cases every 2-4 years), it can become a great source of passive income.
 
Wilfrid Laurier University, the University of Waterloo, and Conestoga College are each growing in prominence, and with this growth come larger student bodies and thus a greater demand for nearby accommodation (note that this growth has stabilized, though).
 
So as the total number of condo units grows each year, the student demand has kept pace.
 

Read More About Us and See Our Client Testimonials

 

General Rental Tips, and Important Steps

 
First of all, you’ll need to think carefully about how (and if) you’ll be able to make the arrangement financially viable. Your regular expenses will include condo fees, property tax, insurance, hydro, electricity, and heating – add these together (it’s best to look at the annual average for hydro/electricity/heating, then dividing it by 12, as the prices will vary by season) to get an idea of how much rent you’ll need to charge in order to offset the outgoing expenses.
 
Also be aware that you are limited by how much you can increase rent each year, once a lease agreement has been signed, so make sure you’ve settled upon an appropriate amount. It’s possible to make a pure profit from renting out a condo – and having your tenant handle the hydro/electricity/heating costs is helpful – but breaking even, or taking a small financial hit some months, still means you’ve invested in Kitchener-Waterloo real estate, and upon selling the condo, you can still stand to benefit substantially in the long run.
 
Next up, if your condo is in Waterloo, you’ll need to fill out a few forms, gather together several requisite documents, and apply for a Residential Rental Licence from the City of Waterloo, which must be renewed annually by April 1st.
 
You can find out all of the details here; it’s also wise to peruse the Waterloo’s Rental Housing Bylaw, which enumerates the licencing requirements. The final step is finding the perfect tenant(s). It’s incredibly important to screen tenants carefully and methodically, as disputes can be quite difficult to sort out, and damages to the condo (or common areas) are tricky in terms of liability.
 
Some condos allow short term rentals (things like Airbnb), but this is up to each individual condo board. If you don’t want to rent out your condo, but are still buying it purely as an investment in Waterloo real estate, it’s important to monitor the market for maximum profit (pay attention to sale prices in your area, and quantities on the market), and put time into staging the condo and choosing a great Realtor to list it on MLS.
 
Let’s take a closer look at that.
 

Find Out How Much Your Home is Worth

Reselling Your Condo

 
We’ve been focussing on Kitchener-Waterloo condominiums fairly extensively this week, and for good reason: the condo market here is soaring. Plans for 20 new condominium developments in Downtown Kitchener (valued together at over $1 billion) alone serve as an indicator as to the region’s demand for condominiums.
 
Amazingly, even though there are many new condo units entering the market, the demand is still incredibly high. It’s not uncommon for most, or all, of a new condo development’s units to sell out before construction has even been completed.
 
Indeed, a shortage on the supply end of things is presently a major theme in Kitchener-Waterloo real estate. What does this mean for someone interested in reselling their condo? Quite simply, it means it’s a great time for someone interested in reselling their condo.
 
It is currently a seller’s market, and listings receiving multiple offers have become the norm. New developments, with all the latest amenities, are quite popular, as are condos in popular locations, and ones with distinctive characters (such as the trend in Downtown Kitchener to convert older buildings into modern developments).
 
There is the potential for incredibly high returns on investment – higher even than Toronto, in many cases, and with the added benefit of lower price points to begin with.
 
If you’re looking to invest in a condominium with the intention to resell it (or ‘flip’ it, as it were), here are some of the areas that are worth paying attention to: first up, Downtown Kitchener.
 
Its Innovation District is the beating heart of Kitchener’s startup climate, and with Google’s headquarters and the Tannery (which alone has hundreds of startups, and Communitech), there is incredibly high demand for nearby condo accommodation (young professionals are a key Kitchener market to tap into).
 
The LRT is another factor making condos in Downtown Kitchener a savvy investment for resellers, and indeed, investing in condo units near other sections of the LRT will also offer higher demand and higher prices.
 
Speaking of other sections of the LRT: Uptown Waterloo, and the environs of Waterloo’s universities are excellent options for anyone looking to purchase and resell a condo. Purchasing a condominium within a 2 kilometer radius of the universities will ensure a large market of students, staff, and faculty.
 
Uptown can be attractive to these markets, too, but it has the added benefit of many seniors and established adults keen to live near the bustling refinement of Uptown (and, again, the LRT). These three areas tend to have higher monthly condo fees, so that’s a factor to keep in mind if you’re planning to wait on reselling the property for more than a few months.
 
Southern Kitchener (especially the rapidly-developing southwest corner, and the area around Conestoga) has plenty of condos (mostly townhomes) that are sound investments, too: Conestoga for the same reasons as Waterloo’s university area, and southwest Kitchener for its massive (and growing) market of buyers; both for the lower condo fees than Downtown/Uptown.
 
Generally, there are a few additional factors that can be highly beneficial to a condo’s resale value. These include: proximity to Highway 401 for southern Kitchener, and the Conestoga Parkway for condos further north and west in Kitchener-Waterloo; proximity to shopping; and the number of nearby popular attractions (like parks and athletic facilities).
 

Read Our Comprehensive Home Seller’s Guide

 

Conclusion

 
If you like the sounds of investing in Kitchener-Waterloo’s condo market, then we’ve done our job: WRX Property Group truly believes in the opportunities available in Kitchener-Waterloo real estate, and we would be happy to share our expertise with you on your investment journey.
 
We value mutually beneficial transactions over sales, and we’re committed to getting the best value for your specific needs. If you have any questions at all, or you’d like to look into buying a condo in Kitchener-Waterloo (or selling a condo in Kitchener-Waterloo), please don’t hesitate to contact us.
 
Written by Will Kummer
 
Book A Consultation