I hope you have been enjoying your summer!
We have been able to get out and enjoy some of the beautiful weather over the last few months, but probably not as much as we would like. We continue to focus on getting prepared for our projects that are coming up in the next few months. Often we take these slower summer months to work on improving the company’s processes, and working on solving any issues we ran into over last seasons’ projects. This allows us to continue improving the business, as time goes on.
I wanted to follow up on our previous newsletter with the investment strategies that came from the tiny home show. There were a few potential strategies that I found interesting and you may want to consider going forward.
Land Leasing
The first strategy I found interesting was leasing land for a Tiny home. Nowadays, people are looking for ways to get into home ownership and given the prices of the tiny homes, they seem like attractive solutions.
However, once they have the home, they still require a place to put it. Often people cannot, or choose not, to purchase the land to put there tiny home on. They may want to remain free to move someplace else with their home, or they simply do not have the funds.
Below is an ad placed by someone looking for land to lease for their tiny home.
At five hundred dollars a month, I don’t think this strategy is very interesting given that they would need parking and reduce the amount of space for the other tenants to enjoy on the property. However, there certainly could be a price and terms that would make this compelling. If they were willing to pay for some of the utility hookups and upgrades to the property, and pay a reasonable rent, something to the effect of one thousand dollars a month, I would start to find this to be a fairly appealing strategy to increase cashflow with very minimal investment.
It could be a win-win for both the home owner and the investor. The tenant would have a significantly reduced rental rate, allowing them to save for their own plot of land one day, or extra cash for other things they would like to spend on. All these benefits for the tenant while also giving the landlord a low maintenance, quality tenant that will care for the property at a reasonable rental rate.
The Cottage Court
The cottage court has been a style of development that has had my interest for a while now. It is characterized by multiple smaller dwellings all on a single lot. There is a large common area for all of the residents, and each individual home has a small private amenity space. Essentially, it is a small subdivision or tiny town.
Below are a few examples:
I have thought that this is an ideal development style for a few areas.
The first is when trying to increase density in established neighborhoods with larger lots, outside of the downtown urban centers. Given its lower profile, large amounts of green space, feeling of independence, sense of community, and ability to be creative in design, it should see far less resistance from established communities than other multifamily development types.
Another area where I see this being a viable option is greenfield developments. As land prices continue to increase, fewer and fewer people can afford your standard 2500 sq. ft. detached home. Adding this style of development gives developers another tool in their toolbox to maximize the land that they have, while helping with the housing shortage. I see these projects fitting in well at the outskirts of town where townhouses may feel out of place, or when the project is backing onto green space.
It also is an interesting style of development for cottages as the name suggests.
Our Duke street property is the first cottage court style development in Durham Region however, it is over 3 lots. We saw very little resistance from community members with regards to its development. If we had proposed a 9-unit building in the same location, we likely would have been met with far more resistance. This is just one example, but it does support how these developments may, in general, see less resistance.
At the Tiny home show, there was a non-profit that was approaching municipalities with amendments they could add to their zoning by-laws in order to make these developments possible. If they are able to get any traction and win a few municipalities over, it would certainly be something to be keeping an eye on as a potential creative investment strategy.
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