REIN investment has become increasingly popular in Canada, especially in cities with strong real estate markets like Toronto, Vancouver and Montreal. As a leading real estate investment network, REIN provides market insights and connects investors to opportunities in the Canadian real estate market. However, REIN investment also carries risks that need to be properly managed. In this article, we will analyze the opportunities and risks of REIN investment in Canada.
Booming demand for rental housing near universities
One major opportunity highlighted in REIN’s University Effect report is the huge unmet demand for purpose-built rental housing around Canadian universities and colleges. With over 1.5 million students in higher education and growing international enrolment, student populations are surging but supply of off-campus housing lags far behind the US and UK. High demand from millennial students and projections of over 410,000 more beds needed near campuses represent strong tailwinds for REIN investments catering to students.
Understanding generational preferences
Today’s students have unique preferences for amenities like luxury furnishings and high-end appliances. REIN advises landlords and developers to ensure housing meets the expectations of millennials and Gen Z. Those who fail to provide suitable accommodations risk vacancies and turnover. On the other hand, investors who understand the needs of student demographics can boost occupancy and rental income. REIN’s Hot Zone and Goldmine Scorecard tools help assess the maturity of student housing investment opportunities.
Following university expansion and enrolment trends
Savvy REIN investors track where student populations and housing demand are growing fastest. With Canada’s reputation rising and international enrolment up 52% in 2018, universities are expanding and welcoming more students every year. REIN identifies leading growth schools like UBC Okanagan, University of Alberta, University of Saskatchewan and University of Prince Edward Island as potential hot zones for investment.
Managing interest rate and market risks
While fundamentals may seem attractive, REIN investments are not without risks. Rising interest rates could dampen prices and affordability as mortgages become more expensive. Supply-demand imbalances in local real estate markets also add uncertainty to exit strategies. There is no guarantee rental demand near campuses will continue outpacing new construction. Investors should be cautious of overpaying for properties and conduct proper due diligence.
REIN investment provides opportunities to benefit from Canada’s growing and changing student housing needs. But investors must also watch for risks including rising rates, market volatility, oversupply and shifting preferences. Proper analysis and planning are key to realizing upside while minimizing downside risks.