What do boomers want in retirement housing?
First, define a new class of housing that is beginning to evolve. I call it a “Future Primary Residence” (FPR). Residential real estate basically falls into just 3 simple types: primary homes, second homes, and investment properties. The new fourth type of property fits between a second home and an investment property, it is a ‘future primary home’. These properties are different from traditional second homes because they are not ‘cottages’, they are full size homes, loaded with amenities and available year round. FPRs are unique in that they are purchased with the full intent of being the family property and all of a sudden the family home or primary residence that was close to work becomes a transitory waypoint and is no longer the home. Empty nesters might as well put the for sale sign on the ground, they intend to move on as soon as possible.
Around age 50, statistics tell us, is the age when most people buy a second home. In a survey of second home buyers conducted by the National Association of Realtors, it was found that the motivation for owning a second home was often as much for investment as for personal use. Since they won’t be able to use the FPR or second home full-time for several years, renting it out makes perfect financial sense.
When a 50-something year old buys a condo in Florida for a second home, but proceeds to rent it for more than 45 weeks a year, isn’t that investment property? The motivation for purchasing this particular condo had little to do with its tremendous potential to generate rental income, and much more to do with his desire to spend his retirement years watching sunsets over the sea. His primary motivation was for future personal use as a ‘future primary residence’ or retirement nest. To add to this case of a new housing category, this condo was probably a considerably upgraded residence with granite countertops, a large master suite, and probably an elevator (even in single-family homes) for future concerns with mobility in old age. Investors just don’t add these kinds of amenities to a mere rental property. The buyer’s goal in renting is often to break even and hopefully pay off debt to build a nest egg for retirement. Something I’ll call Best Egg from now on.
The National Association of Realtors, one of the largest trade organizations in the United States with more than 1.2 million members, has studied boomer trends in great detail. Boomers will have prioritized these qualities in Besting retirement housing:
o Walkable Communities
or Activities
o Luxury and quality
o Amenities not of size
or affordability
this is from a new book called: “Besting – Better Nesting” http://www.betternesting.com