Excellent Investment | McMaster University Rental

McMaster Investment | 35 Arkell Street, Westdale, Hamilton
McMaster Investment- Just Listed

•  1308 sqft , 2 bath , 8 bdrm 1 1/2 story – FOR SALE $629,900 . Excellent Cap Rate!
MLS® H4043496

Looking for a great, solid McMaster Investment property close to the University, transit and Westdale Village? Check this one out- same owner for 20 years!

Solid brick, single family 1 1/2 storey home with newer concrete front porch, steps, walkway and quality, maintenance free railings/handrails. Newer windows except for the original leaded glass front window that maintains the homes original character and curb appeal.

Hi-efficiency furnace and 100 amp electrical on breakers. Smoke detectors in all bedrooms. This home offers 2 kitchen area’s, 2 baths (both with easy care acrylic/fibreglass tub/shower surrounds), super sized living room, an additional common area in the lower level, 5 bedrooms up and 3 in the lower level. Features a very high basement plus a fantastic 3-4 car recently paved side drive. Good solid 10 1/2 x 22′ detached garage.

Also has sufficient frontage (37′) and setback to support additional side by side front parking allowing for 10 habitable rooms and compliance with current zoning by-laws if required in the future. Currently leased to a group of students until the end of April/19 for $3625/month including utilities. Gross income $43,500- Net income after property taxes and utilities approximately $34,000. Great rental area for students- steps to transit, shopping and University.

24 hours notice is required for all showings. Note: House is occupied by students- pictures are true to the interior condition of the property and have not been staged for marketing purposes; bedroom conditions may vary depending on housekeeping habits of the occupant.

Property information

Turnkey Investment; McMaster University area-Hamilton

 

•  2 bath, 4+2  bdrm 1 1/2  story – $487,900.
MLS® #H3185180

–  This is a Mac Investment dream; great cap rate! Deluxe updated and maintained 1 1/2 storey with extra long side drive and solid concrete block garage, minutes to Mac. Updates include: kitchen, thermo windows & steel doors, upper level gutted, re-insulated and drywalled, basement waterproofing, front and back porches replaced, central air, rebuilt roof on garage, recent siding and garage door, plus both bathrooms have just received a facelift. Newer stove, washer & dryer, 2 fridges. Good high, dry basement with large windows and side door access. Current rental agreement includes monthly cleaning service, internet & utilities. Contact Listing Agent for tenant details.

SOLD

Student rentals: Finance update April 2016

Financing Student Rental properties in Hamilton

Student rentals are investment properties; the problem is most banks do not want to finance them. Regardless if you’re buying a single family home or a multi unit rental building to rent, the banks underwriting departments want to make sure that #1- you have a reasonable expectation of collecting the amount you’re renting it for and #2- the property can be legally used for the rents you’re collecting. A home rented to a family is rarely a problem. With 2-6 unit buildings, the bank wants to make sure the property is zoned for the number of units you’re renting. Most banks just don’t like student rentals!

How the bank sees a Student Rental

So what’s the problem with student rentals anyhow? For the most part, they’re just single detached houses- aren’t they? Well, the banks do have a problem with them;  even though these properties are in fact single family homes, “the tenant” is usually a group of unrelated 18-23 year old students.

Then there’s negative publicity around student rentals. Residents are constantly trying to cope with being neighbours to properties filled to the brim with fun loving students and absentee landlords. This means no lack of publicity for this type of housing as the City is constantly trying to balance the need for student housing with the rights of non-student residents. Complaints are constant: properties that are housing too many students, lack of fire safety, illegal construction/building of bedrooms along with property standards and parking bylaw violations.

Student Rentals vs. Lodging Homes

The rules around renting to a collective of students can be complex. First of all, students are a protected group under the Human Rights Code. Cities have been told they’d be wise to avoid any type of zoning that could be considered “people zoning”.  The Human Rights Commissioner has stated that groups of students who want to live together as a family unit while attending school away from home, have the same rights under the act as any other family unit and municipalities must respect this right. At the same time, municipalities have the right to enforce their zoning bylaws.

 

Illegal development

Just because it’s there, doesn’t mean it’s legal and it certainly doesn’t mean that you can get it legalized on the basis that it’s already there. Doesn’t work that way. For example, if the original house is a 2 bedroom house with a kitchen and living room, you cannot assume that the 4 bedrooms in the basement are legal. If they do not comply with the Ontario building code, that is if the ceiling height is below the requirement or there isn’t adequate light (windows) they may in fact be “illegal”.

Rules and regulations are in place for a reason. The City has a right to be concerned about over intensification along with owners circumventing the building permit process and creating additional bedrooms and bathrooms without inspections, approvals or permits.

Sometimes Buyers and Sellers will go through great effort to “de-student” properties, trying to convince the appraiser and bank that it’s not what it is. They take all the locks off the doors and try to clean it up in an effort to make it look as “single family” as possible, but it seldom passes the scrutiny of an appraiser familiar with the area. Even though the Buyer swears on their life that they’re going to be renting this property to a nice young couple with 4 kids, most banks decline.

Getting a mortgage for a Student Rental in Hamilton

The Royal Bank is one of the few major banks interested in financing Student Rental properties in Hamilton. This is not an ad campaign for the Royal Bank, nor do I collect a referral from them for promoting their services- just passing on the info!  The good news is that the Royal Bank has expanded their student rental finance program: increasing the number of properties from 5 to 9 and reducing the down payment required from 30% to 20%. When the Royal Bank’s appraiser shows up at the property, they know it’s being used as a student rental; no need to try to pull the wool over their eyes or lie about what you’re going to be using it for- which by the way is really “mortgage fraud”, but that’s another subject!

Insurance:

Also, make sure your insurance company knows that the property they’re insuring is a Student Rental. Just like banks, many companies will not insure these properties. If you experience a loss, you may face issues making a claim.

Summary

So, if you’re purchasing a Student rental keep in mind that the City “usually” doesn’t have a problem if the property contains eight habitable rooms and houses 6 students. If you’re creating more living space, make sure you obtain a building permit. The City also “usually” doesn’t have a problem if you have one lease on the property, even though there may be 6 individuals signing on the lease. And lastly, if you need a mortgage, DO NOT try to pull the wool over the eyes of your financial institution. Ask them straight up if they will finance a student rental- if they don’t, contact Katie Morrison, Mortgage Specialist for the Royal Bank in Hamilton.