Why Guelph Townhouses Are a Smart Investment Choice

Key Factors Driving Guelph's Appeal

• Steady Rental Demand
• University of Guelph Proximity
• Rental Income Potential
• Appreciation in Property Value
• Low Vacancy Rates
• Limited Land Supply
• Affordable Entry Point
• Management Ease

Property location is a critical factor in real estate, as it can determine the demand, value, and potential for future growth. 

So, is it a good investment to buy a townhouse in Guelph?

Renting out townhouses in Guelph can certainly help you achieve your financial goals. Guelph offers several viable opportunities due to its volume of people searching for homes and proximity to amenities, like good school districts, shopping centers, transit services, and the University of Guelph. Being a small town with a big city feel, there are also several employment opportunities.

Since buyers typically look for neighbourhoods that suit their lifestyle, investing in houses near the University of Guelph is an attractive choice for the overflowing student population. Just as families with young children look for neighbourhoods near good schools, parks, and recreation facilities. 

Guelph rental homes also appeal to investors because of the steady rental demand, proximity to the U of G, rental income potential, appreciation and property value, low vacancy rates, limited land supply, affordable entry points, and easy management. 

Steady Rental Demand

As more people move to the Royal City, fewer are buying homes, choosing to rent instead. And as house prices go up, so do rental costs, meaning landlords charge more for their properties. And even when house prices drop, rents aren’t likely to come down with them. 

The steady demand for townhouses for rent in Guelph is primarily due to students looking for accommodations, young families just starting out, and retirees who are downsizing. So, why townhouses? These dwellings typically rent for slightly less than a stand-alone detached home, but not enough to affect an investor’s yield. The high demand for student rentals especially means excellent potential for attractive returns for anyone wanting to invest in this sector. Renting a townhouse and targeting the student crowd also means:

• Increased potential for year-round rental income
• Consistent demand for accommodation
• A stable tenant base

University of Guelph Proximity

The University of Guelph is among the top 20 Canadian universities with no shortage of applicants and plenty of need for student housing. On average, the university houses 4,700 - 5,000 students, leaving countless without accommodation. This competitive market consistently fuels ever-growing home rental costs. 

University of Guelph townhouses that accommodate multiple students can help you meet the increased demand for student housing, lock in long-term rental agreements, and cater to academic staff and researchers.

Rental Income Potential

One of the most attractive reasons for investing in a multi-family home, such as a townhouse, is the opportunity to earn passive income, especially if you rent to University students, where you can charge each student for each bedroom. 

Townhouses aren’t only easier to finance, but they allow you to grow your portfolio quicker and earn a steady stream of income. And you can boost those earnings by renting out fully furnished homes. Landlords can charge 10-20% higher for fully furnished rental units. For example, an unfurnished property for $1900.00 per month can go for up to $2280.00 when fully furnished. A furnished dwelling comes with increased benefits, like:

• Charging higher for rent
• Collecting a higher security deposit
• Attracting higher-quality tenants

Appreciation in Property Value

Gueph’s population is forecasted to grow to approximately 208,000 by 2051. The population sits at 152,963 as of September 2023. An attractive city labour force across a wide range of expanding services and goods-producing sectors will drive growth and future economic success. 

Guelph’s student-dominated communities offer higher levels of appreciation due to their insulated markets. Since student housing remains consistently in high demand, properties geared towards students are less likely to devalue, even when national markets slow. 

Another reason for purchasing a townhouse is capital gains. As property values continue soaring, townhouses purchased today for X dollars could be worth Y dollars in the future. The difference between X and Y may equate to hundreds of thousands of dollars — a wise investment strategy to fund one’s retirement. 

Keep in mind that several factors can impact property values, such as:

• Location
• Comparable neighbourhoods
• House size and usable space
• Upgrades and updates
• Age and condition
• Market conditions
• Economic growth
• Infrastructure development

Low Vacancy Rates

Increased demand paired with low supply means a rental imbalance throughout Guelph’s housing market. A Guelph CMHC rental marketing report states that Guelph’s vacancy rate is 1.4%, almost half of the national 2.4% average. Low vacancy rates are due to the strong local job market, the draw of the University, and Toronto's proximity. 

Reduce the risk of townhouse investment and enjoy a steady income by attracting and retaining top-quality tenants by:

• Offering competitive pricing
• Providing flexible lease terms
• Offering discounts and rewards
• Enhancing the property’s appeal
• Respecting tenants’ rights and privacy
• Communicating and engaging with tenants

Limited Land Supply

The effects of the housing crisis reverberate across the city of Guelph, with limited land availability for development. Population growth in Guelph is outpacing provincial and national averages with a rate of 2%. 

This scarcity of land and a growing population creates a supply and demand issue, driving real estate and rental prices up, offering great potential for future property value increases. 

Guelph townhouses have an Affordable Entry Point

Another good reason to buy a townhouse as a rental property in Guelph is that they typically cost less than standalone houses — newer townhouses can cost thousands of dollars less than a single home right next door. Because of its lower entry point, townhouses equate to lower mortgage payments for those who can’t afford to enter the market otherwise. Smaller mortgages also mean paying off your debt sooner and putting your rental income directly in your pocket. 

Real estate  gives investors an ideal opportunity to diversify their their portfolios without a significant upfront cost. There are a few potential financing options for investors, including:

• Conventional bank loans
• Hard money loans
• Private money loans
• Tapping home equity

Ease of Management

Townhouses are comfortable, middle-ground homes between condos and detached and semi-detached houses. They’re usually more spacious than high-rise condos and don’t have the same costs or maintenance needs as detached/semi-detached homes. 

There are a few advantages of owning a townhouse in terms of management:

• Low purchasing cost
• Minimal maintenance needs
• Strong rent potential

While additional work comes with owning any investment property, professional property management services can do much of the heavy lifting on your behalf. Often, property managers are worth their weight in gold as they deal with tenants, repairs, and maintenance, so you don’t have to. 

Ready to Invest in Guelph Townhouses?

The demand for Guelph townhouses has experienced exponential growth. With the average rent in Guelph hovering at about $2,500 per month, a 1.4% vacancy rate, and a 2% population growth rate, townhouses are a great way for investors to build a strong, steady cash flow. 

Guelph real estate has long-term potential and benefits, like consistent rental demand, substantial student population, low vacancy rates, affordable entry points, healthy local economy, and scarcity pricing — all factors that make investing a minimal risk. Especially when you partner with a real estate agency with extensive knowledge and experience with the local market. 

Welcome to Andra Arnold & Associates — Guelph’s local real estate experts. We’ll match you with some of the most sought-after rental townhouses in the country, help you navigate a seamless home-buying experience, and turn it into a lucrative one. 

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