What's the best generation to target?

Question

So I keep reading how retirees are targeted as tenants for rental properties. What percentage of retirees have to rent? Maybe it's because their 401k didn't perform as expected? Or maybe they've always rented because they could never afford a house?

We still have approximately the next 15 years of Baby Boomers hitting that retirement age. Apparently that's 8,000 new retirees a day pondering what to do now. Should they relocate to a better, preferably warmer climate or stay put?

Or how about the new family who can't afford to buy a house, so they need to rent for an extended period of time until they have saved up enough for a down payment.

And then of course there's the people who can never afford to buy a home so they will always be renting. But then that doesn't fall into a generation as it's throughout their whole life.

Who's the best generation to be catering for or does it vary city by city, state by state?

Is there a clear cut answer?

Gerald Harris · Answer

I hear you.   You may want to consider The high desert as well.   There are cheap homes up there, but no economy.   Its a great place for retirees.   I have cousins and aunts that live in the Victorville/Hesperia area.

Also, think about renting rooms, this will increase your cash flow.

In desert you may get a house for say 1200 per mo.   and you can rent it for 1200 per mo.

Shoot for a 4bedroom house for that rate.   Rent rooms for $500 each.    That's 2k per mo.    1200-2000 is 800 bucks profit.   Nice

Shane W. · Answer

Thanks guys.

As I keep discovering the answers to all my questions is research, research and more research!

What websites are the most useful for working out demographic targeted questions?

Jen Kurtz · Answer

@Shane Willcox

I would agree with @Gerald Harris

- all about supply and demand. See whats going on in your market- look at who is coming in and who is going out. A growing trendy area with jobs is certainly going to grab millenials, where as a quiet inexpensive place will appeal to retirees who might not care about jobs but will have the services they need available to them. That would be not only medical care, but entertainment and restaurants. A lot of boomers may want to sell that big house with steps they have and get cozy in a more energy efficient 2-3 bedroom ranch without all the upkeep! Find the need and fill it :)

Marcus Johnson · Answer

The star and tribune had a good article regarding this topic in the Twin Cities.  It found through it's survey's and percentage of homes bought by generation, that the Millennials are some of the best renters in the Cities for the following reasons:

1.  They took out to much on student loans

2.  They want to use public transportation and thereby need to be close

3.  They like to bike and not own cars.

4.  They want to live in the city, close to stores and restuarants.

* Before this study came out, my thought was that since Minneapolis has been rated #1 in number of people biking, I figured I buy my duplex that is in a clean, affordable, trendy, low crime rate and close to public transportation type neighborhood.  South Minneapolis is where I bought my duplex and it is rented by a 29 year old male and a mid 30's married couple with no children.

Elizabeth Colegrove · Answer

I think it depends on your business model. We buy class a properties that are in great school districts. They tend to be the crappiest house in the nicest neighborhood. We tend to appeal to a lot of transient families or new to the area.

Shane W. · Answer

Thanks Gerald. Yeah I guess the biggest problem I'm having is finding the right area to pursue. I'm looking to buy and hold so anything in my neighborhood is well out of my range. Finding these areas is the challenge for me, especially as it's more than likely going to be out of state.

Mary B. · Answer

@Shane Willcox IMO, the answer is everyone. However it also depends on the niche you choose. Who you buy from should be everyone. Who you sell / rent to may vary. If you are doing assisted-living deals then obviously they won't be fresh out of college... If you purchase a few starter homes to flip or rent out, then its likely most of your customers will be youthful(single / not long married) as first time homebuyers. Then again it depends on the economical situation of that particular housing market. It may call for a spike in middle aged tenants because they wanted to get rid of that big house after their kids moved out and they want to get something smaller but didn't want to deal with another mortgage. This is why its very important to research the local housing market before you purchase especially if its out of state purchasing. My coin.

Kudos,

Mary

Gerald Harris · Answer

The answer is supply and demand

For that matter, you have a large number of people retiring that are looking for rental property.   Santa Monica CA has a different market and makeup than Atlanta GA.   Or, if you have a property near a college, you may target college students (Parents) as opposed to retirees etc.....    Find the are that you are focusing on.   Call 3 management companies in that area and ask them what is their greatest demand.  Also call 3 real estate professionals in that area.   They their areas and understand their markets

What's the best generation to target?

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