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As a real estate investor, your success will often be determined by the tenants you select. While many investors opt to pursue younger tenants and student rentals to take advantage of new renters entering the market for the first time, plenty of investors overlook the potential for some of the most stable, long-term tenants – seniors.
While each demographic has its own unique advantages and disadvantages, seniors are among some of the most overlooked individuals when designing rental properties. However, by taking the time to cater to the older market and senior housing, investors stand to find the ideal tenants for long-term investing.
To demonstrate the advantages of renting to seniors and investing in senior housing, here are a list of reasons why seniors make excellent tenants.
However, before we dive into the realities of senior housing as an investment strategy if you want to learn more about how to finance these properties, all you need to do is click the link below to book a free strategy call with our team at LendCity.
Low Turnover Rate in Senior Housing
One of the advantages of renting to older tenants is the low turnover rate when compared to younger renters. While younger tenants are working to get their life started, older tenants will usually be looking for a place to settle down.
Young tenants move much more frequently than older ones due to the nature of their lifestyle. As individuals start new careers and grow their families, they look for new residences to suit their updated lifestyle. However, seniors and retirees have typically slowed down and are ready to get comfortable instead of pursuing the next advancement in their lives.
This results in a low turnover rate of approximately 5%, meaning your monthly rental income will remain steady for years to come without the concern of looking for new tenants every few months or years.
Older tenants usually have more steady incomes than their younger counterparts. This is due to the fact that these tenants have usually been in their jobs for a longer period of time and have much higher job security. Meanwhile a younger tenants will more frequently be looking to settle into a career and pursuing new advancements. This is great for the individual, but it can occasionally result in inconsistent income and late/missed rent payments.
In the case of retirees, income is often even more stable than working tenants. This is because of the guaranteed monthly retirement payments they would be receiving, part of which can be immediately set aside for rent. As a result you will most likely not have to worry about delayed payments.
Seniors are Often Wealthier
Another advantage to renting your properties to an older tenant is the fact that seniors are often wealthier. Seniors have had more time to save money, build wealth and invest, leading to larger overall savings. These tenants typically can afford nicer, more expensive rental properties allowing you to generate more rental income in exchange for higher levels of luxury and comfort.
Unlike other tenants who are often renting because they have not built the wealth required in order to buy their own properties, older tenants become renters to take advantage of reduced responsibility and enjoy more leisure as they reap the advantages of the wealth they built earlier in life.
Reduced Wear and Tear
Usually, older people are quieter and more careful than younger renters which can be very advantageous for real estate investors. Since there are typically fewer parties, large gatherings or small children present in these households, any concerns that the property will become damaged or require more frequent maintenance will be greatly reduced.
However, with the advantages of older tenants, there are also certain factors you must take into consideration as well. Here are some of the key areas of concern you must prioritize if you are planning to attract older tenants.
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Key Priorities For Senior Housing Investments
Whenever you go to invest in senior housing, there are a few key priorities you need to put into consideration:
One of the most important things for the majority of seniors and retirees when looking for a place to live is accessibility. Elements such as steep staircases, narrow hallways or the lack of a bathtub can all be deal breakers for some older people. So, if you are buying with senior tenants in mind, you have to be sure you are buying properties that those tenants will be able to traverse and interact with more easily.
Often if you are trying to prioritize accessibility, single storey homes are an ideal place to start due to the absence of stairs, thus making them a better choice for people with mobility concerns.
Safety should always be a top priority when you are buying rental properties. However, when you are planning to rent to seniors it will be worth you time to put extra time and care into making sure the properties you buy are laid out with safety concerns in mind. For example, you should avoid having tile floors that become slippery when wet to avoid any unwanted falls.
As well the ideal properties should be located in quieter neighbourhoods with low crime rates, so you tenants feel safe at home. To increase the sense of safety you can install security cameras and an alarm system into your properties to help your tenants rest easy.
Finally, since some older tenants may be less mobile than others, you should aim to buy rental properties that are very close to local amenities such as grocery stores, pharmacies, and entertainment so that your tenants can easily access everything they need. You should also prioritize the proximity to public transit in case any of your tenants cannot drive and need to go across town.
To learn more about residential real estate investing, visit us at LendCity. Our network of investors and real estate professionals will gladly help you get the answers to any questions you may have quickly and effectively. So if you are ready to begin, give us a call at 519-960-0370 or visit us online at LendCity.ca Alternatively, you can learn how to incorporate senior housing into your investment portfolio by booking a free strategy call at the link below.
Investing In Senior Housing Properties, With Scott Dillingham
Investing In Senior Housing Properties, With Scott Dillingham
In this video, Scott is going to touch on why investing in senior housing properties is a sure fire way to make easy investment money.Want to read the articl…