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Discussion Starter #1
Hello,

I got a couple quick questions and didn't know what to search. I'm looking at buying a house. I want to use this house for a student rental but of course I don't have the 20% down payment so I'm going to have to live in it. My question is how long am I required to live in it before I can move out to make it a full rental? I don't want to do anything risky/questionable in the banks eyes. I don't mind moving in because it'll give me a chance to fix it up how I want it.

My second question is who can point me in the right direction to look up renting to students in a house you live in vs renting to students in a rental house.

I'll take any comments/advice good or bad

Thanks!
 

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I'm not sure how long you have to stay in it before it is ok to move. I can tell you this though banks are really cracking down on this so it would have to be over a year I think to be safe.

Second it's not great idea to buy an already student house better to buy a house near a school and just use that.

Third student housing and room rental are a real pain in the *** if you don't live there or very close so you can keep an eye on things. It is very easy for things to get out of control.

Where are you going to live? There are some very cheap houses near schools that you can buy and rent a few rooms. Almost every school has a list where you can give your name to rent space.

Also if you decide to go this route you should definitely keep a room for your stuff. Because you "live" there and share a kitchen and bath with your tenants there are different and better rules for the tenancy. Plus you never have to give 24 hour notice so you can check any time. Plus insurance is a lot cheaper.
 

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Discussion Starter #4
I'm not sure how long you have to stay in it before it is ok to move. I can tell you this though banks are really cracking down on this so it would have to be over a year I think to be safe.

Second it's not great idea to buy an already student house better to buy a house near a school and just use that.

Third student housing and room rental are a real pain in the *** if you don't live there or very close so you can keep an eye on things. It is very easy for things to get out of control.

Where are you going to live? There are some very cheap houses near schools that you can buy and rent a few rooms. Almost every school has a list where you can give your name to rent space.

Also if you decide to go this route you should definitely keep a room for your stuff. Because you "live" there and share a kitchen and bath with your tenants there are different and better rules for the tenancy. Plus you never have to give 24 hour notice so you can check any time. Plus insurance is a lot cheaper.
Thanks Berubeland. It is actually a house I am looking at that I would live in and convert to a student rental over time. Do you know how people work leases when it comes to rooms in a house? I guess I couldn't have a lease for the whole house since I would be living in it. Do you know if there is restrictions on how many rooms I can rent? I wonder if there is an authority I should or can contact for NB to find out this kind of info.


The phrase "fraudulent misrepresentation" comes to mind.
That is exactly what I'm trying to avoid. I'm not looking to do anything greasy. I'll play by the rules if I can figure them out haha.
 

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It depends on the city/town you are in. Sometimes you have to be licensed above a certain amount of people.

Then it can also depend on the legislation for tenants in NB which I know nothing about.

One thing is for sure, If you are doing any type of room rental you have to really keep track of what is going on in your property. It can be very profitable but is tons of work.
 

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How long?

Circumstances change all the time. I purchased my condo in the summer of 2007 and made it a rental in the summer of 2008.

I had clients that were having a house built and purchased a condo to live in until it was complete with the intention of renting it when they moved into the house. This was disclosed to the bank and they still considered the condo their primary residence because it was at the time of application.

Generally as long as the mortgage payment is being made banks don't really question anything.

This is the wording on the CMHC Site:

At initiation, the property that secures a CMHC-insured mortgage loan must be intended
for occupancy at some point during the year by a borrower; or a relative of the borrower
on a rent-free basis.
Lenders must confirm owner occupancy and maintain the confirmation on file.

http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Purchase.pdf

Pretty flexible. Sound to me like you do intend on living it it to fix it up. I would say you are good to go!!
 

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If the home you buy is a standard single family, and you want to 'convert' it into a rental, be mindful of zoning requirements. You will be limited to what you can do to it and how many students can rent it. On the other hand this is an easy way to get to know your new neighbours:)
 

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I can't see the bank having a problem with you after 20% is paid down.

Also...in your listing for the rental...list it under 'room for rent', as that is basically what you are renting. You could list online for free, or the local university/college will probably have a postings board, you would need approval from the school, but that would be free too.

When I went away to school, I rented a room in a house. Two different places actually. The owners lived there too. One place an older woman rented two rooms, and the other place the owner rented 4 rooms. I needed quiet to study. And I think my parents liked knowing that an adult was in the house too.

I would check on the zoning first though....single or multi family dwelling.
 

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You will definitely need to check local by-laws of the city where you intend to do that and what their regulations are.

Example:
Here at my location the city bylaw doesn't allow renting more than 4 rooms to individuals...
 

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Discussion Starter #10
Berubeland, thanks I will look into the official acts and see if I can't get some help from someone making it clear to me.

How long?

Circumstances change all the time. I purchased my condo in the summer of 2007 and made it a rental in the summer of 2008.

I had clients that were having a house built and purchased a condo to live in until it was complete with the intention of renting it when they moved into the house. This was disclosed to the bank and they still considered the condo their primary residence because it was at the time of application.

Generally as long as the mortgage payment is being made banks don't really question anything.

This is the wording on the CMHC Site:

At initiation, the property that secures a CMHC-insured mortgage loan must be intended
for occupancy at some point during the year by a borrower; or a relative of the borrower
on a rent-free basis.
Lenders must confirm owner occupancy and maintain the confirmation on file.

http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Purchase.pdf

Pretty flexible. Sound to me like you do intend on living it it to fix it up. I would say you are good to go!!
Thanks for that Shayne! Sounds like I should be all set judging by that wording. I don't think I'll worry as much any more because I'll end up living there for a bit anyway. Hopefully it'll all come together.

Thanks Cal and Alex, I'll ask the relator and see if I can find out about the bylaws. I don't think there will be a problem because most of the neighbour hood is students but you never know!
 
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