How to Invest In Real Estate When Your Tenants Are Retired Seniors
I was recently asked a question about seniors and retirement housing and what opportunities there were in several of the cities that I am familiar with. To be fair, I didn’t have a clue! My thoughts immediately turned to Miami and Phoenix. I wanted to do a little research and I felt that I may have come across a golden opportunity to help the golden years generation as they begin to retire!
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I was surprised to find a list U.S. News published in 2010 that had a number of cities I had never thought of before as great places for seniors to retire. Not only seniors…but single seniors not quite ready to hang up their dancing shoes. Memphis, of all places, was named one of the 10 Best Places for Single Seniors to Retire by USN Money. Not only that, but cities from Massachusetts to Georgia, California, Louisiana and even Mississippi made the list. Florida used to be the Promised Land for retirees, but not anymore! Move over, Orlando. There’s a new kid on the block. That may be taking it to a bit of an extreme…but, when I read the article, it got me thinking about opportunity. It got me thinking about my own investments and current as well as future trends. Could I be ahead of the curve and start thinking about senior housing now?
Investing In Senior Housing Is Investing For A Future
So what does that mean for you, real estate investors, landlords and other interested parties? Why, it means you need to know what seniors are looking for in their retirement living, of course! You have the perfect opportunity to put a shine on someone’s golden years. While single seniors spring for both rental homes and apartments, we’re going to look specifically at the best ways to attract and accommodate independent seniors looking to make the most of their retirement.
Baby Boomers are turning 65 and fewer and fewer seniors are moving into retirement communities. They're going to suburbs as much as cities. With such varied preferences, it's impossible to be perfect for every senior. That doesn't mean, however, that there aren't common threads and steps to be taken to attract and please the valuable and growing demographic of independent seniors — who, by the way, are often opting the sell their homes and rent instead for a lot of reasons: a lack of property taxes, fewer upkeep responsibilities and lease and travel flexibilities, just to name a few.
Independent seniors looking to rent a home or an apartment are looking for things that are a little different from the average tenant. Remember that not all tenants will need or want everything on this list — it’s just a starting point to get you thinking about how to target the growing numbers of retirees looking for rental housing.
When It Comes To Retirement Living, Keep These In Mind:
Retirees may not want to deal with the headache of mowing a lawn and pruning back the crepe myrtles, but that doesn’t mean they want to be stuck without a way to enjoy the outdoors at their own home. Having a small, highly manageable yard is a huge plus for seniors (especially if yard maintenance is included in the rent) who want to enjoy being out in nature. An apartment complex that has outdoor walking paths and outdoor community areas with tables and chairs for socializing is also a big selling point.
Close Proximity to Public Transportation
Keep in mind that your tenants may not drive as much as they used to, either by choice or by inability. A location with convenient access to buses, taxis and other public transportation means your tenants can get out on the town and enjoy all the amenities of your city. They may want to live it up while they still can!
When it comes to retired tenants, a smaller square footage is your friend. Just like a smaller yard, a downsize in floor space means less to clean and manage. This isn’t to say potential tenants want to be cramped in an apartment the size of a bread box, but they may not need or want the spaciousness of a nine room family home with three or four bedrooms. Think simple and stylish – go for the necessities but not too many extras.
Here’s an addendum. Smaller doesn’t mean cramped. Doorways need to be wide enough for the navigation of walkers, canes and wheelchairs. Having more limited mobility is already a pain when the corners are easy to navigate, so don’t make it harder for your seniors! Even if they are still independent it doesn’t mean they don’t have special mobility that should be taken into account. Pay attention to the needs of individuals – they might require walk-in/roll-in showers, the installation of grab bars, lever door handles and even chair-level peep holes in the front door. While it’s not necessary to make every unit in your complex handicap-accessible, having a few (near the roomy elevator that you also have, by the way) will come in handy. Remember, too, that under the Fair Housing Act, landlords must allow modifications to meet the needs of a handicapped individual, even if that means requiring the tenant to return the unit to its original state before moving.
If your housing isn’t ground level, you need to have an elevator. Stairs aren’t great for seniors, whether or not they have walkers, canes or wheelchairs. They’re hard on the knees! Going up and down stairs can be hazardous, particularly for seniors. Don’t put them at risk.Fitness Facilities
Throw your preconceptions out the window. Today's seniors aren't sitting around watching Jeopardy all day. This is 2013, the age of the active senior! Providing a well-equipped gym and walking area is a great way to get seniors socializing with neighbors, get out of their apartments and live a more active, healthy lifestyle. In single-family housing, providing opportunities for seniors to be active is a huge plus and it may be advantageous to make deals with local gyms for your tenants to have memberships and roll it up into the rent. I may not go so far as to include any exercise equipment in one of the bedrooms, but I am sure some smart landlord will give it a try and make it work.
Emergency and Security Services
Because single seniors are likely living alone unless they have roommates, extra security precautions are important. Make sure you (or your property manager) pay special attention the safety of your senior tenants. If something happens, they need to be able to get in contact with someone who can help immediately. Don’t ever let your tenants feel unsafe in their home. Check on things regularly with their safety in mind. While plenty of independent seniors don’t want to be coddled or doted on, being attentive is part of being a good landlord. This is another area where a monitored security system can be provided by the owner/management and the monthly cost simply rolled into the rent.
You’re (probably) not running a retirement community.
Don’t feel pressured to have dining services and healthcare or scheduled activities just because you’re looking to have senior residents. Retirement living doesn’t necessarily mean your complex has to turn into it’s own self-sustained, full-equipped community with room service. What’s important when it comes to seniors — as much as any potential tenant — is to listen and to respect their needs and desires in a property. Accommodate to the best of your ability and treat them like the valuable tenants that they are.
Obviously with single-family housing accommodated for senior living, you are not going to have meal services, but do not discount the value of making things easy. Really smart entrepreneurs are going to figure out how to cost effectively offer delivered meal services (already happening), security systems (already happening), electric, water and cable services provided (already happening) and even therapeutic services on location (already happening). When someone figures out how to roll these services into one well marketed package, the costs can be rolled into monthly rental payments and a premium can be charged. Remember, these are the golden years for retirees and many do not want to sit around and be waited on – nor do they want to sit around and wait!
They want to be active and they and their adult children helping provide for them will gladly pay for great service whether it is an apartment or a single-family home!
Have you noticed retirees looking to rent in your area? I would love to hear feedback from anyone either already providing these services or seriously contemplating including them in their over-all investment strategy!