If you’re new to rental property investing, or just want to increase your portfolio, a new survey suggests you may want to take a good, hard look at investing in a retirement property.
Retiring Younger (and With More Cash)
The survey found that Baby Boomers are planning to retire earlier than before — at an average age of 63, rather than age 65. And, roughly one-third of these retirees will be moving into a new home for their retirement years.
In certain areas, like warm, sunny Las Vegas, this is a huge opportunity in real estate for downsized housing.
Keep in mind also, that these are active, highly motivated people with a good savings.
The average 401(k) in the middle of 2017 (for all ages) was $97,700. The average IRA account held $100,200. Retirees tend to be at the top of these curves.
Rent With Boomers in Mind
Revenue streams that could be a real possibility for property owners and property managers include the following.
- Splitting multi-family homes – Retirees usually need much less space than families and first-time homebuyers. They can also be usually quieter than the average tenant. With a bit of additional sound insulation, a property owner may be able to rent a multifamily home twice to multiple retirees.
- Renting single-family homes– Retirees can be some of the best-behaved tenants and homeowners a property manager could ask for. If you’re a landlord who is looking for a good opportunity to make money at scale, focusing on retirement properties could be a great option for you.
At SMART, we encourage all our homeowner clients to make their properties more attractive to tenants — even retirees. Baby Boomers just may find you some strong resident retention in the years to come.