Rental Investors Target Baby Boomers As Tenants
by Annette West, CCIM, MBA, CPA
Rental investors typically focus on younger renters, age 20 to 29. A new renter is emerging, however: the baby boomer, age 50 to 64. Some predict the aging baby boomers will be the focus of apartment investors for years to come, since by 2020 the population aged 65+ is expected to increase from 37 to 55 million.
Compare this to the forecast for the Las Cruces metropolitan statistical area (MSA): by 2009, the 55-64 age bracket is expected to grow by 13.4%, to 41,342 people and the 65+ bracket to grow by 9.1% or 22,622 people.
The big question is: what will baby boomers do? Cash out the equity in their home, and buy two smaller homes (one next to the grandchildren, one in a warm sunny winter location), or buy a condo and an RV, or stay put?? Official estimates are that 27% are expected to be renters, or 17,270 in the Las Cruces MSA.
What type of rental housing will these baby boomers want?
A 1992 AARP survey found that most seniors prefer senior age-restricted apartments over age-integrated apartments. Senior age restricted apartments are usually for those 55 or 62+ and follow HUD regulations which allow for such "age discrimination".
Many offer communal meals, regularly scheduled shopping trips, and various activities for the residents. They usually are Americans with Disabilities Act (ADA) compliant, offering shower handrails, larger doorways for wheelchair accessibility, etc. whereas normally both the tenant and the landlord are responsible for removing barriers or providing auxiliary aids and services.
The landlord and the tenant may decide by lease that will actually make the changes and provide the aids and services, but both remain legally responsible.
Several types of age restricted facilities are currently available in Las Cruces:
-- Independent Living, with the ability to transition into assisted living
-- Assisted Living for individuals who cannot function in an independent living environment, but do not need nursing care on a daily basis.
-- Board & Care Home - Board and Care Homes are small residential family homes which provide 24-hour custodial care for four to six residents
-- Alzheimer's/Dementia or memory loss assisted living
--Skilled Nursing Facilities
--Continuing care retirement communities offers several levels of assistance, including independent living, assisted living