Building a Portfolio to Fund Children's Education

As a Canadian parent, you know the value of a good education. You also know the cost. In today’s economy, saving enough to cover university or college tuition, let alone living expenses, can feel like climbing Mount Everest without a toque. That’s why so many families in the Greater Toronto Area (GTA) and beyond are looking for smarter, more robust ways to grow their savings. If you’re a parent seeking a reliable stream of passive income, it's time to consider the power of real estate investing to build your child’s educational future.

Real estate investment offers an alternative path to the traditional Registered Education Savings Plan (RESP) model, or, more often, a powerful complement to it. While RESPs are excellent vehicles that benefit from government grants, they have contribution limits and may not provide the growth needed to keep pace with soaring educational costs. A well-managed rental portfolio provides two significant advantages: consistent cash flow and long-term capital appreciation, both crucial for tackling the future cost of post-secondary schooling.

The Rising Cost of a Canadian Degree

The price of a university degree is a significant financial challenge for families across Canada. The latest data provides a sobering picture. For the 2024/2025 academic year, the average annual tuition for a Canadian undergraduate student was $7,360 CAD (Robertson College, 2024).

However, this national average only tells part of the story. Location matters, and provinces like Ontario tend to be on the higher end. Furthermore, many specialized programs, such as Law or Medicine, come with much higher price tags. For example, a look at undergraduate tuition by field of study shows that Law averages $14,508 CAD and Medicine averages $15,632 CAD for the 2024/2025 academic year (Statistics Canada, 2024). Multiply these figures by four years, add in mandatory fees, books, and ever-increasing living expenses, and you’re looking at a staggering financial commitment.

What about rent? For students who need to move away from home, the cost of housing in major cities like Toronto and Vancouver can be a huge drain. One analysis noted that an international student in Toronto or Vancouver could expect to pay over $80,000 in rent over a four-year undergraduate program based on 2024/2025 rates (ApplyBoard, 2024). While domestic students may pay less, the pressure is real and constantly growing.

Building Your Educational Real Estate Portfolio

This is where a real estate investment portfolio can truly shine. By investing in income-producing properties, you can generate funds that grow and diversify your education savings plan.

1. Generating Immediate Passive Income

One of the most immediate benefits of rental properties is the passive income they generate. The monthly rent collected from tenants provides a reliable cash flow. This income can be used for several purposes:

• Covering Property Expenses: First and foremost, the income covers the mortgage, property taxes, insurance, and maintenance.

• Funding RESP Contributions: Any surplus cash flow can be funnelled directly into your child’s RESP. This strategy allows you to consistently maximize those government grants without relying solely on your primary employment income.

• Creating a Non-Registered Savings Account: Once you’ve maximized your RESP contributions, the remaining passive income can be directed into a separate, non-registered investment account, providing an additional layer of savings for costs that extend beyond what the RESP can cover.

2. Capital Appreciation and Long-Term Growth

Over the long term, real estate in the GTA and other high-demand Canadian markets has historically proven to be an excellent inflation hedge. As your child grows, the property is likely to appreciate in value. This capital gain offers a substantial lump sum to draw upon when your child is ready for university.

The growth in property value can be accessed in a couple of ways:

• Refinancing/HELOC: Once significant equity has built up, you can take out a Home Equity Line of Credit (HELOC) or refinance the property to pull out tax-free capital, which can be used directly for tuition payments. This allows you to fund the education without having to sell the asset, meaning it can continue to generate income.

• Selling the Asset: If you decide to liquidate the property around the time your child enrolls, the sale can release a substantial amount of capital, offering a final, large contribution to their education fund.

3. Leveraging and Inflation Protection

Real estate allows you to use leverage (a mortgage) to control an asset much larger than your initial cash outlay. This means you can realize a rate of return on the entire property’s value, not just your down payment, dramatically accelerating your wealth creation.

Furthermore, rental income often increases over time to match or exceed inflation, protecting your purchasing power against the rising costs of education.

Your Path to Financial Confidence with Regalway Homes

If the thought of managing a rental property seems daunting, you’re not alone. That’s precisely why the right guidance is critical. Successfully building a real estate portfolio requires a deep understanding of local market trends, property management best practices, and effective development strategies.

At Regalway Homes, we specialize in real estate investing and development in the Greater Toronto Area. We believe anyone can succeed in real estate investment with the right guidance. Whether you’re new to the game and looking to purchase your first income-generating property or you’re ready to expand your existing portfolio, our team is here to support you every step of the way. We help you identify properties with the strongest cash-flow potential and guide you through the process of smart, strategic investment.

Your path to financial freedom and a fully funded education for your children begins now.

Final Thoughts: Securing Their Future

The certainty of a high-quality post-secondary education for your children is one of the most important financial goals a parent can have. While the traditional RESP is a fantastic starting point, coupling it with the power of a real estate investment portfolio can provide the robust, inflation-fighting growth and passive income stream you’ll need to confidently cover the escalating costs. Don't wait until the high school graduation party is over to realize you needed a more aggressive plan.

Discover how you can start investing smartly today. Schedule a consultation with us: https://www.regalwayhomes.com/book-online

Source URLs (AP Format)

• ApplyBoard. (2024). The cost of an international education in Canada in 2024. Retrieved from https://www.applyboard.com/

• Robertson College. (2024). What is the average tuition in Canada for 2025? Retrieved from https://www.robertsoncollege.com/

• Statistics Canada. (2024). Canadian undergraduate tuition fees by field of study (current dollars). Retrieved from https://www150.statcan.gc.ca/n1/pub/12-581-x/12-581-x2022001-eng.pdf