I have felt negatively about these constructs for a long time (I’ve been known to call them “vertical warehouses where people go to wait for death”), but my thoughts crystallized when a friend of mine moved from her farm into a brand-new facility.
It costs her $5,500 a month for a room with a cot, TV, sink, microwave, a tiny w/c, a table not big enough for three people to sit at and windows that only open partway; there is no balcony.
Mind you, the public areas (ground floor dining room and reception) are splendid, but so what? She spends most of her time in her room.
So, from her POV, it sucks. But what about as an asset class?
Turns out, it’s not so hot to own these either.
Here’s a summary of my rationale on all of this:
But now I have another reason—today I learned vacancy rates are incredibly high in these places: 10.3% in Ontario, 13.8% in Alberta in 2019. It’s better in BC and Quebec.
But no matter where you are, compare that to the vacancy rate in one-bedroom apartments in Ottawa (1.4% in 2017) and two-bedroom places (2.1%).
Bottom line: I’m not sure I would ever want to live in one of these places and, I am quite sure, I’d never want to own or run one either…
Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
Century 21 Explorer Realty Inc broker
Ottawa Senators founder
-MAKING IMPOSSIBLE POSSIBLE
-FREEDOM VIA REAL ESTATE INVESTMENT AND PB4L, PERSONAL BUSINESS FOR LIFE
-FEHAJ, FOR EVERY HOME A JOB
-MAKE YOUR HOME WORK FOR YOU, INSTEAD OF YOU WORKING FOR IT
-HIGHER ROI NOT JUST FOR OWNERS AND INVESTORS, BUT FOR TENANTS, GUESTS, VISITORS, NEIGHBORHOODS, COMMUNITIES, TOWNS, VILLAGES, AND CITIES TOO
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