According to the Baby Boomer Survey conducted by PulteGroup, Inc., Baby Boomers are planning to retire earlier than before – at an average age of 63.7 today rather than age 65 in 2013. One-third of these retirees will be purchasing a new home specifically for retirement. 33% of them will be downsizing and be moving to a specific location – near family and a relaxed lifestyle.
Retiring Sooner and Keeping Their Lifestyle
In certain areas that Boomers are moving to, such as Arizona and Florida, there is a huge opportunity in real estate for downsized housing meant for retirees. Most of the neighborhoods and districts that are built around this theme have peaceful lifestyles with stable home prices and plenty of public amenities to attract the best clientele from around the nation.
With 25% of 65-year-olds today set to live at least an additional 20 years, there is time for retirees to purchase a new home in full. These are active, highly motivated people (72% of people reported a happy retirement in a MassMutual survey) with good retirement savings. The average 401(k) in the middle of 2017 (for all ages) was $97,700. The average IRA account held $100,200. Retirees tend to be at the top of these curves.
Keeping Up with the Boomers
All they need is someone to sell them the dream! Revenue streams that could be a real possibility for property owners and property managers include the following.
- Splitting multifamily homes – Retirees usually need much less space than families and first-time homebuyers. They can also be usually quieter than the average tenant. With a bit of additional sound insulation, a property owner may be able to rent a multifamily home twice to multiple retirees.
- Property management – Retirees can be some of the best-behaved tenants and homeowners a property manager could ask for. If you’re a professional manager who is looking for a good opportunity to make money at scale, focusing on retirement properties could be a great option for you.
- Helping retirees find the perfect home – Many Baby Boomers want to live near family, golf courses, and clean parks. Property managers who can help retirees find homes, condos, or apartments like these will have a huge opportunity as the Baby Boomer class retires – in very large numbers in the coming years.
As a property manager, looking for ways to make your properties more attractive to retirees or even soon-to-be retirees might find you some strong resident retention in the years to come.