Mr. Cheap asks: Help me buy a house!

by Mr. Cheap

I’m gearing up to buy my second investment property. Now that I’ve been at the university for a year, settled in pretty well (it’s not looking like they’re going to kick me out) and know the area a bit better, it’s time to consider buying instead of renting.

My plan is to be here at least another 3 years (PhD programs can take 4-7 years). I’m leaning towards a condo townhouse, with 3 or 4 rooms total. I’ll live in whichever is the least desirable room, and hope to rent out the other rooms for $400 / month each (+/- a little bit if some are better or worse than the others). I’d *CONSIDER* a unit with a separate basement unit (which I might live in myself if I decide to splurge).

I’m hoping to get a property for less than $40k / room (which I suspect will make it far more likely that I buy a 4 bedroom townhouse than a 3). I’m ok with a condo townhouse (they seem quite a bit cheaper locally than houses, but if there’s a detached house selling cheap I’ll take a look). Ideally I’d like something within a 15 minute walk from the University of Waterloo or Wilfrid Laurier University (I can walk further if its closer to WLU), but would consider something up to 30 minutes walk away. I’d consider a property one bus ride away from the universities if it was a VERY good price. Cosmetic damage is ok, and more serious damage MAY be ok.

I’m hoping to keep better track of how much time I put into the house hunt this time. Currently I’ve looked at two properties and have invested about 2 hours in the process.

My plan is to put in offers on multiple properties, much as I did last time (I may elaborate on this in a future post, as I think its a really great idea).

Some of the downsides, which I’ll be happy to tell any agents / sellers asking how I arrived at my offer price, is that real estate is going down everywhere, including the Kitchener / Waterloo area. I’m hoping to deal with this by getting a good price on the purchase (and accepting the risk that it may keep dropping after my purchase). Many multi-unit buildings catering to students have popped up recently and there seem to be a number of vacancies in the properties around the campuses. I’ll deal with this risk by being willing to adjust my rents to whatever price point gets me tenants, being willing to add some extra amenities (such as wireless internet, cable TV and maybe a bi-monthly cleaning service) and being on-campus and hopefully able to recruit tenants from people I know and “friends of friends”.

If anyone knows of a property that meets this criteria, that is either currently available for sale or might be soon, please encourage the owner to contact me at cheapcanuck@gmail.com. I certainly won’t promise top dollar, but I’m not picky about the minor details, and will be ready to buy for the right price (cash offer, minimal conditions which will be quickly removed, flexible on closing date).

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