Don’t Ignore this Demographic When Looking for Renters

If you’ve been following this blog, you know how much I emphasize the importance of understanding your demographic. Whether you’re marketing to young families or college students, it’s critical that you identify your target demographic’s wants and needs so that you can capitalize on them. It just makes sense for both renters and investors.

Today, I want to discuss a demographic that I feel is often overlooked, and that is the Baby Boomers. Many of the investors I know are looking for young singles, or new or growing families, and the generation born between 1946 and 1964 simply isn’t on their radar.

I believe this is largely due to misconceptions about what this older demographic wants. I think many investors/landlords operate under the following assumptions:

1. Baby Boomers already own their own homes and therefore do not need to/are not interested in renting.
2. They’ll move into a retirement community/assisted living/nursing home when the time comes.

I’ll say it plainly: you’re doing yourself - and the Boomers - a disservice if you’re making these assumptions. The truth is, there’s a large swath of Baby Boomers who are looking to rent, and that number seems to be growing by the day.

Consider these statistics:

• There are about 80 million Boomers in the U.S. right now, and their median age is 62.
• Age 62 is when people are eligible to start receiving Social Security benefits, a milestone that many are looking forward to in order to retire and supplement their income with these benefits.
• Unfortunately, a large percentage of these people are not financially ready to retire. In fact, 24% have no retirement savings, and only 55% have anything saved for retirement at all. About half of retirees are living off of social security alone, and the average Social Security payment is only about $1,300 per month.

What do all these numbers mean? They mean that a vast majority of Baby Boomers are not in great financial shape, and this could definitely have an impact on housing choices. Some Boomers may elect to sell their homes to make a profit and pad a limited income or savings, while others may find it more cost-effective to rent.

In a 2016, Freddie Mac surveyed renters who were aged 55 and up. The findings were interesting, to say the least.

• 71% of respondents indicated that they planned to rent again.
• 59% thinks it makes better financial sense for retirees to rent instead of own.
• Affordability, walkability, and easy access to amenities are the most important factors when finding a rental.

When you add up all this information, it paints an interesting picture for investors. Clearly, there is a segment of the market that needs - and will continue to need - rental options that fit their unique needs. As an investor, you can use this to your advantage. Demand is high, but supply in your market may be low, as so many investors are busy targeting Millennials and other younger generations. Don’t overlook the Baby Boomers as potential renters. They’re a big part of our population, and they may become a big - and profitable - part of your rental portfolio.