If you are serious about taking your real estate business to the next level, you’d better be paying attention to the trends in this business. Those investors that do are always way ahead of the curve. They always seem to be the first ones at the party while everyone else is still trying to figure out where the party is.
Looking in the Right Direction; Follow the Money
The way you figure out where the party is, is to follow the money. So ask yourself this; what is one of the biggest trends and one of the most underserved niches in real estate? That would be baby boomers. When was the last time you thought about this segment of folks when you were deciding looking closely at the direction of your business? I’m guessing these folks have never crossed your mind. But I’m going to give you some reasons you should definitely care.
Here Are 77 Million Reasons
It is estimated that there are approximately 77 million people that fall into this generation called “baby boomers”. These are the folks that were born roughly between 1946 and 1964, and they are the fasting growing segment of the population. Met Life Insurance estimates that they have spending power of at least 2 trillion dollars. This particular group of people owns more real estate than any other single demographic, and they are moving into retirement in huge numbers. It is estimated that 8 out of 10 baby boomers own their home, and many of them have one or more other properties such as a vacation home or investment property.
Now those are some pretty impressive numbers! The question is how do we tap into this potential huge source of business?
What Do They Want and Need?
Understanding what they want and need is crucial, and that depends on their age, their retirement income and a number of other variables. One thing you definitely need to understand is that there are basically two groups of people here.
One group is the younger baby boomers that are ages 47-55. Their needs are slightly different than older boomers. Many of the individuals in the younger group are still looking for larger living spaces where most of the older boomers are looking to downsize. It is estimated that 29% of Americans 50-64 plan to move in the next 5 years. The opportunities for real estate investors will be different for each these groups.
- It is estimated that only about 1 in 10 baby boomers fall into the category of “boomer elites”; those folks that are very wealthy. But folks that fall into that group are upgrading their homes or buying expensive second homes even though they are retiring soon or are already retired. They want “one last hurrah”. If you live in an upscale area where wealthy folks like to retire, this is a niche you can definitely explore.
- Some folks are ditching those big suburban homes and moving into urban areas. They want a different kind of life; one that doesn’t require the expense and time involved to take care of those big homes. This group wants to downsize and tap into a more urban lifestyle that includes having restaurants, shopping, theaters and other amenities close by (they are all about the amenities).
- They are often sophisticated but want to live simply. These baby boomers are making bold lifestyle choices for their “second act”. The vast majority of these folks still want to own property rather than renting so they are looking at condominiums. It is expected that condominiums in urban areas will continue to be a popular choice for many retirees.
Speaking of Amenities…
- Many of these baby boomers will continue to work for some years so they want home offices that will allow them to use the latest technology.
- They prefer to have everything on one level.
- They also understand that they will most likely be facing changes down the road, so they want things like wider doors and hallways that can accommodate their needs later in life. Most people moving at this stage of life consider it to be their final home purchase.
What about the Rest of the Boomers?
Some folks like their neighborhoods. They just want to downsize into a smaller house. Look at where this group of people (the ones that will have enough retirement income to be able to live comfortably) will want to live when they retire. Even if they are downsizing, location will be very important to them. They are looking for a good quality of life that is comparable to the one they have today so they may not want to move into a significantly different neighborhood.
Where are the opportunities for you to provide this type of housing?
What Are Some Other Things on the List?
Here are 4 things they will be looking for:
- Easy access to quality healthcare
- Many people in this group especially older boomers are concerned about security. Safe neighborhoods and gated communities are attractive to them.
- Some folks will want to relocate to an area free of weather extremes. If you are located in a warm weather climate, you will have a lot of opportunity.
- Access to public transportation will be a concern for at least some baby boomers.
Opportunities in Rental Property
There are a significant number of people that will no longer be able to afford to keep their homes once they retire and these folks will be renters. Where will they want to live? What can you do to provide housing for these folks? This group will also have similar safety concerns and a desire for certain amenities.
There Is Opportunity Here for Every Real Estate Investor
I’m pretty sure that most real estate investors (including me) haven’t given much thought up until now about how they can tap into this vast amount of “potential business”.
Where do you see opportunity in your community to grow your business? How can you adjust your marketing to tap into this market?
Be sure to share your ideas in the comments below.
Photo: Tommy Hemmert OlesenHow to Kick Your Business Up A Notch by Tapping Into "Baby Boomer Niche" by Sharon Vornholt