Then and Now – Canadian Apartment Properties REIT
Welcome to another Then and Now post, a continuation of my series where I revisit some older blogposts and either rip them to shreds (because my thinking has changed on such subjects) or I’ll confirm my position on various personal finance topics or specific stock and ETF investments.
You can check out my previous posts in this series about these stocks below:
This was my latest post about Royal Bank.
Today’s post is about a popular Real Estate Investment Trust (REIT): Canadian Apartment Properties REIT (CAR.UN).
Then
- Unlike other dividend paying companies that I’ve owned for over 10 years now, companies like Royal Bank, CIBC, BMO, Fortis, Procter & Gamble and J&J to name a few, I actually don’t have a dedicated post talking about CAR.UN and my initial purchase.
- I do recall when I started to look at this stock though, about 8-9 years ago.
- CAPREIT (CAR.UN) has been growing its portfolio over time. They’ve always had a diverse portfolio of multi-unit residential properties, including townhomes, in many major Canadian urban centres.
- They have been one of Canada’s leading and largest REITs for many years now.
- I recall looking at owning some CAR.UN around 2012 although unfortunately I didn’t buy any shares until mid-2013. I recall the price was about $20 per share with a lump sum purchase in my RRSP.
- I’ve held these initial shares over the years in my RRSP.
- CAR.UN was a top REIT I put on my radar to buy more of in 2019:
- I did buy a small bit then and I bought more of it in 2020.
Now
- I now own a few hundred shares of CAR.UN at the time of this post.
- I enjoy the built-in diversification from this company – they now have over 65,000 residential rental apartment and townhouse suites and manufactured home community sites in their portfolio – owning properties in Canada, the Netherlands, and Ireland.
- I like the fact this company (and some rental income in general, with housing supply so low across Canada right now) is largely recession proof.
- I own REITs like this as a hedge for higher inflation (that’s now here).
- Since owning this stock, my total return is almost 90%. It would have been higher had I made a larger initial purchase but alas, hindsight is 20-20.
- I have no plans to sell any portion of CAR.UN this year although I may trim all REITs in favour of low-cost ETFs and/or keeping some cash as semi-retirement approaches.
Not every stock in my portfolio is a winner. Far from it.
However, through a disciplined buy and hold and buy some more approach for the majority of my holdings, the collection of stocks I own and the dividends and distributions keep flowing in over time – pushing my income stream higher and higher.
What do you make of my decision to own CAR.UN? Do you see more growth for CAPREIT going forward?
Thanks for your readership.
Mark
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
Always feel this one is too expensive and never pulled the trigger, sigh. Just like anything else, good quality doesn’t came with a cheap price.
If I could go back, I really should have bought car.un instead of bpy.un. Just sold my last share of BPY.UN.
I got out of BPY.UN as well once I had the chance! I don’t own any now of that one.
Alas, there will always be bigger and better winners out there but also losers on the other side!
Hi Mark,
Thanks for the post. It was interesting to read your posts and saw your approach is evolving. I saw myself in your 2016 post where you un-resemble etf into dividend stocks. Since I started investing with TD eSeries (coach potato)- then etf (CPM) now I adopt your approach with DG stocks. You could imagine that my portfolio is messy. Now I gradually sell my eft but will keep them 50% in my portfolio. One thing I find that US etf provides me a good returns so I may continue to buy eft not individual stocks. My QQQ return over 50% and VOO 30% after 3 years. I just wonder if your recent returns has decreased when you buy more eft instead of individual stocks? Thank you. Kim
Holding VTI in my wife’s RRSP was a smart move. It has gained about 13% over the last decade. I’ve gone back and forth with VTI over the years and I should have stuck with it. I had many units of VYM but noticed that this approach cost me last year.
https://www.myownadvisor.ca/lessons-learned-in-diversification/
With that link, you’ll see I’ve gravitated again to owning more VTI over time where I can afford to buy more along with existing U.S. stocks. I try to avoid selling winners and JNJ and a few other stocks are some of those in my portfolio. QQQ has been good to me over the last 6+ months and I figure by owning that I can avoid figuring out what the biggest tech company will be. I own them all!
I find the U.S. market in general “tough to beat”. I find our CDN market rather easy to skim and hold the same boring stocks the big ETFs own and earn decent income from that. That’s just me though!
All the best Kim!
Mark
Hi Mark,
Thanks for sharing. I agree, US market is tough to beat so etfs is a way to go. Actually it’s Warren’s advice:)) I hold some looser US stocks in non-registered account. I plan to sell them and buy new stocks in RSP. However, it’s hard to sell b/c it may go up some day:)) Did you have similar experience. What’s your thought? Thanks, Kim
That Warren guy is very, very smart. I own some of the same boring stocks he does like JNJ, PG, ABBV, VZ. After a few others, I index invest. It’s simply smart to do so as you know!
https://hedgefollow.com/funds/Berkshire+Hathaway
Of course I have some loser stocks/stocks that didn’t perform as well as I would have liked but thankfully more winners!
Very hard to predict the future Kim. I wish I know what all stocks had in store 🙂
Mark
Hey Mark, good post, thanks. Always like your posts on interesting stocks.
I bought 108 shares of CAR years ago at about $14.6. Now at about $56 (I think), I’m up 283%. Wish I had bought a lot more!
Take care.
Boom! Impressive stuff and well done. Yes, wish I coulda sometimes….right? Only so much money to go around!
All the best,
Mark
Looked into CAR.UN a while ago but didn’t pull the buy trigger. Kinda wish I did. 🙂
Ah, there are just so many stocks. Hard to own them all unless you index – so I’m working on the latter for extra diversification. 🙂
This is a great REIT, Mark. I didn’t get in as early as you did, but 2017 wasn’t a bad time to start a position. Some people may have a problem with the low yield. But I think CAR.UN will make up for it with capital appreciation over time. Their revenue is still growing year after year. 🙂 Like you said, we have a supply shortage in this country. I don’t see the pressure going away any time soon.
Same Liquid. I see CAR.UN as a decent capital gains play while I get paid. It has never had a high yield since I’ve owned it but yield isn’t everything as you well now – I like total returns and CAR.UN should deliver over time.
Great review Mark on a stock I really like. I believe they are the largest residential REIT in the country, plus the Europe presence you mention.
I bought in late Oct 2016 @ 29.50 which gives me a 88.2% gain. I’ve been dripping all of the time although I hold just shy of enough shares to drip when the price is lower than now. Only picked up 22 shares from drips. With drips my return is 106.15% in 4.5 years so fortunately its been one of my winners. I can’t see demand and prices for renting going down. They’re too low now IMHO, relative to purchasing. Although when interest rates rise REITs free ride will change. I suspect it will remain on my hold list for some time.
I should add 88.2% is sans dividends. The 106.15% doesn’t include dividends to cash, only drips which were about 40% of the time. Too lazy to calculate total return including cash dividends, but probably another 10%or so. Avg cost is about 26.90.
Nice work. 🙂 I hear you about being lazy with the portfolio. I don’t watch my holdings very often anymore!
Thanks. I’m pretty hands off stuff now too.
I’d need to dump another ~$3200 into CAR to be able to drip. That’s based on price now, up 2.76% today as a minute ago. LOL
The interesting thing is because I was on the edge re being able to drip for much of the time my avg cost really benefited by only dripping when it really dropped in price.
Our Killam is starting to move nicely now too. Another one that may have a decent future. Although NS put rent cap on @ 2% so not good, and clamping down some on renos for higher rents. We may have a govt change and if so cap will likely go.
Killam was doing very well pre-pandemic I recall. It got hit with many other REITs in March 2020. I think things will come back. I have a hunch RioCan in particular should consider to climb and get back to 2019 levels around $25-26. I wouldn’t be surprised if it hits that later in 2021.
Yes, big fan of CAR.UN and I see no reason not to continue to own it. I’m just shy of being able to DRIP it and would love to do so in the coming years to accelerate my ownership. I also can’t see demand for rentals going down near-term.
Thanks for your comment!
I have been buying some health care ETF’s. Most likely this time ZHU from BMO . Look at their track record. Lots of people haven’t been to a medical professional because of the virus. The medical profession is going to be gangbusters the next couple of years.
I think your hunch is spot on. Healthcare stocks in general should thrive in the coming decades with demographic shifts well underway. Big fan of JNJ and ABBV in particular. If they are good enough for Warren Buffett they are good enough for me!
Mark,
Interesting on CAR as I am selling them. Sold some last week and going to dump the next 300 in the coming weeks. If you got in like you did in 20014 your doing OK. I got in the last couple of years and made very little, still down on some . Even the annual 2.4% div is not that impressive for me. So whatever , that’s my take on it,
Good Luck,
Tony
Good to hear from you Tony. Well, I will continue to hold this one…I think it has upside due to housing supply issues. At 2.4% yield, very steady payments.
Where are you going to invest the proceeds?
Mark