Should I stay away from 55+ communities?

Question

Hello, I’m new to the real estate business and I’m just currently focused on learning everything I can (through books, podcasts, forums, etc).  Probably won’t buy my first place for another 2 years but figured I could start analyzing deals now to get an idea of the market in my area.  My problem is that the only nice places I can find (being that I’m located in South Florida) are usually located in 55+ communities.  Are these viable sources for passive income? Are there any other hidden costs?

Brian Garrett · Answer

Another downside is they take longer to sell since they require a specific buyer. They also can have high HOA’s and rental restrictions so you have to be careful. I stay away from 55+ here locally for that reason as do most of the investors that I know.

Jaysen Medhurst · Answer

@Brandon Smith, I have a colleague who has done very well with 55+ in NJ. The upside is that there is very little turnover as once people settle in they tend to stay until...well, the end. They are also much gentler on a property than younger tenants with kids, or having parties, etc.

The downside is that there isn't as much opportunity to push rents and keep them on pace with the market for current tenants. Many seniors live on a fixed income, so you can't just push their existing rents as their benefits probably aren't keeping pace.

Halcyon Feurtado Hoagland · Answer

Hi Brandon, I would tend to agree with @Brian Garrett--in South Fl. my experience is that the rental restrictions are tight, but do your research.  If you need help, please reach out.

Brandon Smith · Answer

Thank you both for the useful information.  As for the downsides, they don’t seem too detrimental to my goals so I’ll keep an eye out and use extra caution.

Should I stay away from 55+ communities?

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