The aging parents of the Millennials, the Baby Boomer renters, are now looking to downsize. In many cases they look to move to a rental that is smaller than the traditional family home. They want more flexibility in lifestyle.
As a real estate investor and landlord myself I understand that tenants are the pillars of our business.
I work with hundreds of investors and carry a high level of interest in these tenants who represent our customer base. I trust that you, as a diligent investor and landlord, do as well.
We need to know exactly who are customer are. I have done research like the post, Why Millennials are important to landlords and the five things you need to know. There is another group important to landlords and investors — the aging parents of the Millennials, the Baby Boomer renters.
The young adults who have been living with their parents have finally flown the coop. Their parents (the Baby Boomers) are selling their homes and downsizing.
An interesting and unforeseen event has taken place. College towns are attracting both Millennial renters and the Baby Boomer renters alike.
Back in the ‘50s, ‘60s and ‘70s, the aging populations would stay in their homes and eventually gravitate to retirement communities. Today, they want to enjoy the good life and not be tied down. Like the Millennials, they want to be surrounded by activities, and college towns provide these activities.
Recently Bloomberg News reported that real estate developers such as Bozzuto Group, Abelson’s management company, and Alliance Residential Company are building projects where multiple generations can coexist. Should the supply of rental properties fail to keep up, however, younger people will be competing for housing with the burgeoning population of older Americans.
“It’s a combination of their sheer size and that they’re entering the age range where they increasingly downsize,” Jordan Rappaport, a senior economist at the Federal Reserve Bank of Kansas City, who has also studied the subject, told Bloomberg News. As a result, “It will put upward pressure on rents for all types” of multifamily homes, he said.
13 things Baby Boomers want and landlords need to know
- Retirees want smaller communities in areas where the cost of living is cheaper.
- Baby Boomers enjoy the cultural offerings, such as ballet or museums.
- Walkability scores win over this crowd. They want to be within walking distance to many activities.
- They love to golf, so it should be near if not within the community.
- Fine dining and higher-end restaurants should be close.
- This group wants low-care or maintenance-free living environments.
- 50 percent are renting single-family homes with all maintenance and yard care services included.
- When living in a multifamily unit there should be a community room for social gathering.
- Boomers want two- and three-bedroom units for an office or visiting children.
- They prefer higher-end finishes in kitchens and baths.
- A low tolerance level for things that do not work right.
- Wine refrigerators
- Touch-button window screens
Alliance Residential is designing buildings with smaller, more affordable units on ground floors to attract young adults, while creating more spacious apartments on upper levels, said Ian Swiergol, managing director of the developer’s division covering New Mexico, Arizona and Utah. The bigger units feature wine refrigerators and touch-button window screens that appeal to baby boomers with more wealth.
What landlords need to know about Baby Boomer renters
You may use similar methods to rent to Boomers that you have used in the past to attract and get good tenants. But a large distinction is the changing technology.
A growing number of Boomers are tech-savvy. Boomers also start their search online, but unlike their Millennial children they do not care about online applications. But they want to look at a website to start their search. The key to capturing the Baby Boomers online is to make them feel welcome.
They want to see pictures of not just young adults, but also Boomers like themselves having fun.
If you know what their hot buttons are, such as the 11 items listed above, you will be able to create better marketing to attract them.
Good, helpful information about the attributes your rental provides and how it matches their desired lifestyle will win this crowd over. More important than the features your rental offers, you will win them over by selling the benefits of the property.
A growing rental segment
Baby Boomers moving into uptown districts surprised most everyone.
Builders are actually planning future developments with them in mind. Both the multifamily builders as well as the single-family builders have all discovered a growing market segment in Baby Boomer rentals. They have devoted millions to creating new construction that caters to their desires. With their Millennial children having similar interest this is a venture they feel confident will pay off with sustainability.
High-End Apartments Attract Baby Boomer Renters
The Phoenix Business Journal recently selected the new Crescent Scottsdale Quarter at the top of their Exclusive Apartments list.
- As part of the Scottsdale Quarter mixed-use development, one-bedroom apartments go for as high as $2,297 per month, earning the complex the No. 1 ranking.
- The Citrine multihousing project, with 312 units located near the east end of the Camelback Corridor, was second with a maximum one-bedroom rental rate of $2,001.
- Third on the list was the Broadstone Waterfront with a max rent of $1,971 for a one-bedroom apartment. All the information on the list was provided by Yardi Matrix.
What the numbers show
A study from the Joint Center for Housing estimates 2.2 million seniors will be entering the rental market over the next eight years and many will be Baby Boomer renters.
Further study estimates 50 percent of them will rent single-family homes, a finding that excites most of my real estate investing clients.
Fueled by the desire to be less tied down to responsibilities of maintaining a home, this group of people likes the comforts of renting. The similarities of Millennials’ wants and Baby Boomers’ wants are creating quite a stir.
Such a different age group with such a similar set of wants within their living environment creates a large demand for age-neutral amenities. A post written by an editor from a residential construction group will give you further insights on conquering the age divide.
About the author:
Larry Arth is the founder and CEO of Equity Builders Group, a Florida based Real Estate investment Group. He is a 36-year veteran to real estate investing. Larry understands that we are now in a global economy and as times have changed. Investment strategies must change as well. Larry is an internationally recognized consultant and speaker. He assists hundreds of investors per year, both foreign and domestic. Larry analyzes locations across the country for economic strength and the locations that yield the largest most sustainable return on investment. He seeks out and gathers the best teams in these location to deliver sound, high performing and most importantly sustainable turnkey investment. He works with investors to ride the wave of each area-specific market surge. Larry’s primary focus is offering (Non Listed) safe and sustainable turnkey investments to the passive investor.