It is not a bad idea to invest into property, I bought a home a year ago, although were I live, 500k would have bought me a mansion on an acreage.
I am not familiar with the residiential tenancy act for Ontario, but I think I have heard that it can favour the tenants (ie, not allowed to evict during the winter months). I have been on both sides of the fence, a tenant for many many moons, and most recently a home owner who rents out her spare room so that she can afford upgrades on her property like gutters, porches and sheds.
If you can get a good tenant that is most important. Become familiar with the tenancy acts, if you are not already. It might now be a bad idea to use leases, especially since you are planning to rent to students, that way at least if anything goes sideways, you can always use the lease terminantion date as a contract end, instead of things getting messy and going to arbitration.
I still can't believe you are looking at 500k though, that is a hefty downpayment, especially if you want to save enough to not fall under the CMHC rules, come buy out here! There are several LNG faciliites proposed (although I know you are an envionrmentalist), but with the modernization of our Alcan smelter, we saw house prices almost double due to the influx of transient workers in the area. Rents also went up substantially which is what drove me to buy instead of rent. I started with the bottom rung of the ladder, I bought a brandnew 2014 mobile home for 100k, with 5% down, that is 5000, my morgage payments and pad rent are very affordable, and in five years I hope to own enough equity in it to sell it and put a decent downpayment on a house with a property.
And most important advice i can give you is to get a very reputable home inspector, do a bit of research yourself, always look in the attics and crawlspaces to check for sign of mold or rotting/cracked foundations. There was a very good documentary I saw on marketplace about home inspectors, it might be worth checking out.
Edited by Domnicella, 01 January 2016 - 11:51 PM.