TIME TO QUESTION THE SACRED COWS?
With a successful Calgary Stampede this year, how could we do anything other than continue with the theme?
In one of my first jobs after University, I had a tremendous boss. Her leadership was well known and respected. One of the things she would do is to have a brainstorming session with staff every 5 years or so. The topic: What are we doing that is a sacred cow?
Wikipedia defines the figure of speech, sacred cow, as “something considered immune from question or criticism.” From my boss’s perspective, ‘what do we do on a daily basis simply because, “that’s the way we’ve always done it.”’ Her point? That’s not a good enough reason for a policy or procedure. Change is everywhere, and we need to update and grow on a regular basis.
We used to gown and glove and mask, after a 5 minute surgical scrub – before we could see any patient in the Leukemia unit on our shift. Well, one day someone asked why? Turns out, there was no evidence to back up this practice. Like I mean zero. Very few hospitals were going to such extremes. A research study was set up, and staff were able to prove no change in infection rates – whether we all wore gowns etc… or whether there was a simplified scrub in. Huh. One question saved thousands of dollars for the hospital!
But up until that “Why?” no one even considered changing the procedures at the start of every shift. Because “that’s the way we’d always done it.”
As real estate investors, this is a fabulous time to question our standard operating procedures (SOP’s). Interest rates, financing options, rental rates, property values, and so much more are all changing. Time for a growth spurt!
One of the things we are currently reviewing is our tenant profiles. Why? Traditional thinking suggests that kids grow up, do some adulting, move out and rent for a while, then aspire to home ownership and/or marriage and/or kids. Well, the recent statistics would suggest otherwise. There was also a recent study entitled Generation Rent, https://www.finder.com/ca/generation-rent.
The mindset of renters these days suggests that 29% of Canadians – approximately 9 million adults (18+) – have either given up on the homeownership dream or resigned themselves to being “forever renters”
Source: https://www.finder.com/ca/generation-rent
Analysis conducted by finder.com
The study goes on to explain that 16% of Canadian adults are no longer interested in owning. Yes, even in Alberta where 17% have no desire for property ownership. How has this changed recently? If we look at the optimists point of view, in 2020, 17% of Canadians thought they could be first-time homeowners within 5 years. In 2022, that number is down to just 10%.
Just FYI, current home ownership in Canada is approximately 68.5%. Translation for rental housing providers: at least 30% of Canadians are looking for long-term rentals. Sounds like a lot of demand to me!
From the recent Statistics Canada releases, we learn even more about our current tenant profiles. For example, 23% of couples living together in Canada are common-law. Sounds like it’s time to get very familiar with the regulations regarding common-law unions.
Also, homes shared by multiple generations have grown by 45% over 20 years. And homes shared by roommates have grown 54% since 2001. More stats and the full article can be found at https://www.cbc.ca/news/politics/canada-changing-households-military-1.6519440. Also, the census shows that only 13% of Albertans live alone, even though nationally 15% of people live solo (which is the highest percentage on record and up from the previous census), https://calgary.ctvnews.ca/albertans-not-likely-to-live-alone-tend-to-live-with-parents-statcan-1.5983518. My personal takeaway from this? No one bedroom or micro-suites for me.
How we interpret the changing face of renters, depends partly on the real estate investing strategy we are using. However, it is very clear that many Canadians are renting and will continue to do so; some will do so by choice, some due to affordability. Space for roommates and/or multiple generations looks to be a continuing trend as well. Bottom line: Good quality rental housing should have an abundance of customers for the foreseeable future. We see the current economic environment as a golden opportunity to adapt and grow and change with the times. Apologies to the cows 😊, but this is a great time to question everything!
