From 2010 to 2040, the 65+ population is poised to grow by 90 percent. We are already seeing some of that growth, and it has resulted in a lack of affordable housing options for our nation’s retirees and other older Americans. It is not just subsidized housing that is lacking—even middle-income older adults may have a hard time finding rentals in 2019 and beyond.
Today’s savviest investors will fill this niche with single-family rentals designed to appeal to middle-income older adults. Single-story yet spacious homes in walkable, tight-knit communities give older adults the security, companionship, and space they need to thrive in their later years.
Senior Housing: Pricing Out the Middle Class
Lower income seniors often receive housing subsidies through the U.S. Department of Urban Housing and Development or private charity groups. Wealthier adults can spend their retirement years in luxury communities with all the amenities. Continuing care retirement communities, which allow seniors to live independently and then scale services as they need them, may charge hefty, six-figure upfront fees and then rent ranging from $2,000 to $5,000. This leaves middle-income seniors who cannot safely stay in the houses where they raised their family–or simply do not want to–with few options.
Young Families and Older Adults: Not That Different
Today’s baby boomers live active lifestyles and want homes that will support that in their retirement. Many babysit their grandchildren, so homes with modest backyards and a spare bedroom or bonus room can help accommodate their needs for extra space. While young families want to be close to good schools and shopping, seniors may seek properties close to doctors, shopping, and community centers with activities for older adults.
What they don’t need? Pricey amenities such as pools, spas, and high-end appliances found in luxury senior communities. Investors can cut costs and help seniors afford SFRs by providing the basics.
Filling a Niche
Investors who partner with builders to construct modest single-family rentals tailored to older adults will profit as more baby boomers seek to right-size their living accommodates. Builders and investors can fill an important and growing niche by making homes safer for older adults who are capable of living alone.
Investors looking to tap into this market can partner with a builder during the construction phase or seek SFR properties with features that will appeal to seniors. For instance, homes with wide hallways can accommodate walkers and wall-to-wall carpeting can help reduce the risk of falls caused by tripping over area rugs. Make sure there is plenty of bright LED lighting. Add shower bars to reduce the risk of falls in the bathroom. If you are retrofitting a home to rent to seniors, you can design safety features into the remodeling plans.
Whole-home smart technology found in luxury apartments may put SFRs out of the price range of many seniors but features like a Ring doorbell can provide an added sense of security at a moderate cost.
Whether you opt to invest in single-family rentals within a master-planned community or a property in an existing neighborhood, you’ll face lower development or remodeling costs if you aren’t trying to target the increasingly demanding market of affluent seniors.
Middle-income seniors have fewer options, and are seeking affordable housing solutions that are in short supply. Provide this demographic with affordable, comfortable SFRs in safe neighborhoods and you’ll enjoy consistent rental income with a low vacancy rate for years to come.
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