Why You Should Consider Investing in Retirement Community Real Estate




It is estimated that by 2050, the senior community with makeup over one-fifth of the population in the United States. Currently, citizens of 65 years or older only constitute 15.6 % of the population. This rapid growth has created an urgency in the market to develop senior living units in large numbers across the country. 

The leading senior housing organization, Welltower, INC., has a current market capitalization of nearly 30 billion U.S. dollars. The prospects seem to be promising to invest in the retirement community now. Read on to know more about the pros and cons of such an investment. 

The Positives

The statistics, as mentioned above, are sufficient to convey why senior housing seems to be rising in benefits. Here are a few more reasons for its merit. 

1. Desirable Locations 

Most of the senior communities are sprouting up in regions with warmer climates, and a thriving real estate market. The weather is a selling point, and apart from that, these developments are often located near a bustling city or a college campus with quality health care programs. One way or the other, there is plenty to benefit from the location. Working with a care agency might be an option for your family, if you require assistance in finding a community to best suit your personal needs.

2. Maintenance Covered

Unlike the other real estate rentals, retirement communities offer monthly fees that often cover the homeowner maintenance charges. This would vary depending on the services you provide. Nevertheless, it would include housekeeping, yard work, and other expenses that would reduce the maintenance cost in the long term. 

3. You Know your Market 

Since the houses in senior communities cater to a particular and demanding market, it would be easier from an investor's point of view to devising a marketing plan. You can make alterations or remodel the houses to meet the requirements and make it appeal to the specific demographics. 

4. Fewer Damages to the property 

In comparison to a family with children, a senior couple or an individual is likely to cause fewer damages to the property. They would be maintained well and would cost you less to repair for future arrangements. 

The Negatives 

The pros apart, you are not safe from all the other risk factors that entail an investment in a retirement community. Unfortunately, all the merits could also turn out to be the shortcomings of this choice. 

1. Limited Market 

While the niche market might be appeasing from a marketing perspective, it could also limit your income opportunities. You can market the property only to those of 55 years of age or above, and it instantly cuts a large portion of the prospective buyer group.

2. Limited Locations 

There is also a reduction in property investment opportunities, as such communities are restricted to specific locations on a large scale. Additionally, inside the community, the type of properties are also limited, mostly to single-family houses or independent-living apartments. 

3. Monthly Fees 

As an owner, you are bound to pay a certain fee for the maintenance of your home within the community. These charges have to be paid regardless of whether you were able to find a renter or not. This might cost you extra during the months when you have no tenants. 

With the demographics driving the demand, it shouldn't be difficult to find an experienced real estate agent with excellent reviews to guide you through this investment process. With the right strategy and location, you could be looking at a decent long-term income.

3 comments

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