If your child is going to university or college, consider buying a home or condo that they can live in, and perhaps share with a fellow student who pays you rent. It can be a good alternative to paying thousands of dollars toward residence fees or rent. And it's a real estate investment for you with at least one guaranteed tenant — your child.
4 things to consider
- The rental income can pay many of your costs. Just remember to declare it on your tax return.
- As a landlord, you can claim many of your expenses, including mortgage interest. Assess your costs carefully before you buy. They will vary with the local real estate market, mortgage rates and other factors.
- Plan for some vacancies. Your child (or their roommate) may not stay in the place over the summer break.
- You'll increase your equity in the property as you pay off any mortgage. And the value of the property may rise over time. This can offset your costs. But whether you do more than break even depends on what happens to housing prices in the area.
Remember that mortgage rates and other costs change. These changes will affect the numbers and your decision.