Investment properties come in all shapes and sizes. We all know how the renter's pool is dominated by Millennials' coming-of-age; we also know that accommodating their needs to rent and buy houses is a profitable prospect. However, there is another aspect that the investors shouldn't overlook. It's the baby-boomers.
The baby boomer generation is the one that has accumulated significant wealth as well as creating a demand for residential single-family dwellings. They worked and sought out private residences. However, the time has come for them to retire. This gives an excellent opportunity to the investors to think about investing in retirement homes.
The generation of baby-boomers is now looking to spend their retirement in a peaceful setting, warmer climate and are also looking to downsize. If you are looking for a profitable investment, you should consider investing in the retirement community and targeting this particular group. Here's all you need to know about targeting the retirement community and earning a good ROI.
Definition Of The Retirement Community:
A retirement community is a neighborhood that is designed for seniors above the age of 55. A retirement community works and is built to serve seniors in their golden years. A retirement community is a multi-unit community that mainly comprises of condos, flats, apartments and even semi-detached homes.
These senior citizens are free from nine to five and are looking for a secure community that is filled with like-minded and same-aged people. A retirement community is a well-managed as well as a gated and secured community. A community such as this also has on-site amenities, tailored areas for senior citizens, and an active lifestyle.
A retirement community also has 24-hours on-call staff that is ready to take care of the residents should they need any assistance. Every retirement community is different, but they are based on the same idea. Hence most of them have the same amenities, such as:
- Prepared meals and a dining area for breakfast, lunch and dinner
- Club center recreation activities as well as a gaming and relaxing zone
- Gym and fitness center, most of them also has a SPA
- Housekeeping, maintenance, and cleaning services
- On duty staff
- Outdoor area
- Walking and jogging tracks and parks nearby
The main areas where most retirement homes are located are Arizona, California, Texas, and Florida; these are areas with a warm and mild climate. Due to their climate conditions, these areas are pretty popular with senior citizens. Most retirement communities are pretty close to big cities so that they have access to medical care as well as other entertainment venues.
Many well-planned communities also provide shuttle service to their residents. However, many are just located near public transport so the residents can come and go without any hassle.
Conditions and Rules:
All retirement communities have a set of rules that residents have to follow. One of these rules is the rule that you have to be 55 or older to live in the community; a few also allow younger citizens if they have exceeded the quota. Most retire communities inhabit wealthy seniors who belong to middle or upper-class income holders.
If you are seriously thinking about buying an investment property to invest in a retirement community, here are some pros and cons that you must consider.
Buying a dwelling in a retirement community is a good option since the baby boomers are looking for a place to spend their retirement period in peace. A retirement community gives them the opportunity to spend their days independently, with all the amenities in the world at their feet. They are looking for communities that will help them maintain their current living style without putting in the time and effort. They are ideal buyers, as well as renters.
The demand for retirement homes is not going to end any time soon. By the end of 2060, there will be more than 98 million seniors looking for such communities. So, as far as the targeted audience goes, a retirement community will have a high occupancy rate. The seniors of the future will be looking for assistance, highly-maintained properties and independent living.
The best feature that the retirement community has to offer is plenty of amenities. This is the biggest reason these communities are so popular with senior citizens. Facilities like wheelchair ramps, elevators, 24/7 staff, medical professionals, etc. are the high points of all retirement communities.
Peace and Tranquility:
Like the suburbs, most retirement communities are an hour or so from the nearest cities. This makes them the perfect spot for peace and tranquility that the retired seniors are looking for. Every retirement community has peace and calm in common, no cars honking horns, no noisy kids or loud neighbors.
Depreciation/Wear and Tear:
Most seniors that rent or buy property in retirement communities are without kids, pets or spouses. This translates to less wear and tear as well as damage. Moreover, as these senior citizens are looking for peace, they are less likely to hold dinner parties or have guests over. Mature adults are known to treat their properties with care and respect. So if you are renting out to elderly or investing in a retirement community, your property will experience less wear and tear compared to other kinds of properties.
There are two sides to every investment, similarly investing in retirement communities can have a couple of drawbacks as well.
Monthly Fees And Expenses:
Buying a property in a retirement community to rent out is a great idea, but apart from the buying cost, there is also a matter of monthly fees. Whether you are renting the property or not, you will need to pay these fees that cover things like utilities, housekeeping, various maintenance, memberships for fitness and recreation centers.
The idea of investing in a retirement community is excellent and has very few risks, but there is a limited market risk. As almost all the retirement communities don't allow anyone other than a senior to buy in their community, you will have a very limited market to target.