As a property owner or manager it’s important to keep your finger on the pulse of demographic shifts in your neighborhood, as well as nationally. One big shift happening now in rental demand comes from those 55 years of age and older. Between 2005 and 2016 this group accounted for 44% of all renters. According to the National Association of Home Builders, builder confidence for the 55+ renter segment is at an all-time high. Demand is expected to rise 5 more points in the coming 6 months.
The Ali Safavi Real Estate Why
Many believe this is the result of the Great Recession and a long-term decline in homeownership. During that difficult financial collapse, homeownership among 55+ dropped 6%. Even if they have gotten back on their feet, many are skittish to re-enter the market.
Home prices are undoubtedly another factor as they continue to rise. For many in this age group this is the time when children go to college or move out to pursue a career. Instead of dealing with the hassles of homeownership, they’re deciding to take advantage of the seller’s market that we are living in.
One Size Does Not Fill All
The reason you want to track demographic shifts is that you can be ahead of the curve when it comes to building and renovation. There is no single profile for the 55+. Some want the accessibility of city life, while others prefer smaller communities where they can feel at home. Proximity to family is often the biggest driver of location. However, there are still some things you can keep in mind in order to keep your units attractive to this demographic. Much of it comes down to accessibility and ease. Stairs are often an issue for many, so single story units are always a draw. Low-crime and low-maintenance are also going to be big selling points. Additionally, remember that Baby Boomers are quite active – so the selling point of “nothing much happens here” may not always be a draw.
Do you live in an area in need of housing for 55+? The Midwest and Northeast may be declining in total population, but older households are on the rise. Researchsuggests seniors will make up a bulk of rental growth in Indianapolis, Kansas City, Louisville, Memphis, Milwaukee, and Sioux Falls between now and 2030, as well.
Why This Is A Good Thing
55+ tend to be terrific tenants. They are often retired, which means more disposable income to spend on housing. So if you own a building with a plethora of amenities – these are you perfect tenants. The chances that they are going to throw loud parties and trash the place are slim to none. They’re also less likely to try and AirBNB the unit under your nose (which is a big problem these days).
These may not change your patterns or actions today, but being informed will always keep you one step ahead. Do more research and talk to other building owners. If you see trend developing, take the initiative to be on the forefront of change. No one wants to finish last. We have plenty more property management tips at Ali Safavi Real Estate.