Embarking on the journey of providing housing for your university-bound child involves careful consideration and planning. As parents, you aim to ensure their academic success, financial stability, and of course, quality of life. With rising rent prices and low vacancy rates, many parents contemplate whether buying a property for their child to live in while attending school would make more sense than renting both financially and otherwise. Making the decision to invest in a property is a significant one. In this blog, we’ll outline some of the considerations of purchasing investment properties in Halifax - offering detailed insights, statistics, and expert advice to aid you in making informed decisions for your family's future.
Purchasing vs. Renting - Pros & Cons
The decision between purchasing and renting hinges on various factors, each with its own benefits and challenges. Purchasing an investment property offers the potential for long-term wealth accumulation through property appreciation, control over living conditions, and the opportunity for rental income. However, it entails upfront costs, possible maintenance responsibilities, and less flexibility compared to renting. Renting, while providing flexibility and minimal obligations, lacks the long-term investment benefits and may present challenges when it comes to availability and affordability.
Overview - Pros & Cons
Purchasing
Pros:
- Long-term investment: Wealth-building opportunity
- Control & Stability: Control over living conditions and stability in having a secure place to live
-Potential Rental Income: Option to generate rental income by renting additional rooms
Cons:
- Upfront Costs: Down payment, closing costs, ongoing maintenance expenses
-Responsibility for Maintenance: Depending on the type of property you purchase, you could be responsible for upkeep of the property ( i.e. a condo will have fewer maintenance responsibilities than a single-family home)
-Less Flexibility: You are tied to a specific location. If plans change and your child decides to move, you will need to decide whether you sell the property or rent it
Renting
Pros:
-Flexibility and Mobility: Renting offers flexibility, allowing your child to easily relocate if needed
-Minimal Maintenance Responsibilities: Unlike homeownership, renting typically involves fewer maintenance obligations
-Access to Amenities: Some rental properties offer access to amenities
Cons:
-Lack of Long-Term Investment Benefits: Renting does not offer the same long-term wealth-building opportunities as homeownership
-Availability & Affordability: In a competitive rental market like Halifax, the housing crisis continues to contribute to limited availability of rentals and rising rent costs
-Limited Control: Renting restricts your child's ability to make significant modifications to their living space, and you lack full control over any maintenance or other issues
Investing in Halifax - Is it Worth It?
Halifax, Nova Scotia, offers significant opportunity in the realm of real estate investment, boasting a stable economic environment, academic excellence, and a desirable lifestyle. The following sections outline key factors driving Halifax's allure as a prime investment destination.
Projected Growth in Halifax Regional Municipality
Halifax Regional Municipality (HRM) has been experiencing aggressive population growth, with recent statistics indicating a 4.4% increase in the city's population in 2022. This growth was mainly fueled by immigrants and interprovincial migrants during the Covid-19 pandemic. With plans to double the current population to one million by 2050, Halifax has its work cut out. The housing market faces unprecedented demand, with a current shortage of approximately 20,000 housing units.
*Rendering Courtesy of Government of Nova Scotia
Infrastructure Development
To accommodate the growing population and enhance the city's infrastructure, Halifax has embarked on significant development projects. Notable initiatives include the proposed rapid transit strategy, featuring a network of 4 Bus Rapid Transit (BRT) lines and three new high-speed, environmentally friendly ferry routes. These projects aim to improve transportation accessibility, reduce car dependency, and enhance the overall quality of life for residents.
Proposed Changes to Zoning
Halifax is on the verge of implementing significant changes to its zoning regulations to address the housing shortage and promote densification in urban areas. The proposed changes could lead to the creation of approximately 200,000 new housing units, fostering greater housing affordability and availability in the city. The proposed changes would allow for four additional units to be built on existing residential lots within urban service areas, and up to eight additional units on residential properties within the core of both Halifax and Dartmouth.
Educational & Employment Sectors
Leading universities and key industries contribute to Halifax's vibrant and diverse economy, attracting students, professionals, and families alike. With three major universities, and a wide range of employment sectors, you can be sure that there will always be demand for rental properties in Halifax.
Top Universities:
Dalhousie University
Saint Mary’s University
University of King’s College
Top Employment Sectors:
Healthcare: Halifax is home to two world-class healthcare institutions - QEII Halifax Health Sciences Centre and the IWK Health Centre
Technology and Innovation: Companies specializing in IT, software development, and digital media are thriving in Halifax's innovation district aiding in job creation
Government: As the capital of Nova Scotia, Halifax is a hub for government and public service employment opportunities
Maritime Industries: From shipbuilding and port operations to marine research and offshore energy, the maritime sector plays a vital role in Halifax's economy
Military: Home to Canada’s largest military base, CFB Halifax
Market Stats & What They Mean
Understanding market statistics is paramount in navigating Halifax's real estate market effectively. Check out the Market Stats section of our website for the most up-to-date information on local market conditions.
Buying from Afar - What to Expect
For parents considering purchasing an investment property in Halifax from afar, it's essential to understand the nuances involved in long-distance real estate transactions. Relying on the expertise of local real estate professionals is key to a successful long-distance property purchase. From conducting property inspections to negotiating terms and overseeing the closing process, a knowledgeable local agent can streamline the buying process and provide peace of mind.
You will need to familiarize yourself with provincial regulations that may impact your purchase, such as the Provincial Non-Resident Deed Transfer Tax (PDTT). This additional tax applies to residential properties purchased by non-residents (of Nova Scotia) and is calculated as 5% of the sale price or assessed value, whichever is greater.
How We Can Help
Navigating the complexities of purchasing a property in Halifax from afar can be daunting. That's where our expertise comes in. Our team offers a full-service approach, providing comprehensive support tailored to your needs. With our two decades of industry experience and network of trusted partners, you can count on us to make your investment goals a reality. Here are some of the ways we can help to facilitate your long distance purchase:
Full-Service Approach: From the moment you become our client, we offer a range of services tailored to your needs. Whether you like a hands-on approach or prefer for us to take the lead, we're here to support you every step of the way.
Team Mentality: With a dedicated full-time assistant, your questions are answered promptly, and all paperwork is meticulously reviewed by two sets of eyes, ensuring nothing falls through the cracks.
Virtual Showings: We understand that it's not always feasible to travel to view properties in person. That's why we offer virtual showings via video call allowing you to explore properties of interest from afar. With 20 years of industry experience, you can trust our team to effectively assess properties on your behalf if needed.
Tech-Savvy: We streamline the transaction process by offering digital completion and signing of paperwork. Rest assured that we will keep you informed throughout the process, with all necessary information and documentation readily accessible to you at all times.
Trusted Partners: Need a lawyer, mortgage broker, or home inspector? No problem. With our network of trusted industry professionals, you'll have access to top-tier service providers without the hassle of searching online.
Investing in an investment property for your university-bound child in Halifax presents a promising opportunity for long-term financial growth and stability. By understanding the market dynamics, leveraging expert guidance, and making informed decisions, you can secure your child's future while building wealth through property ownership in Halifax, Nova Scotia.
Have a child headed off to school and looking for more information on this topic? Stay tuned for our FREE downloadable guide coming soon or contact us. We’re always happy to set up a time to chat about real estate goals!
Author: Brynn Carmody
Real Estate Assistant
HalifaxCondos.co
Keller Williams Select Realty