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Rental Investors Target Baby Boomers As Tenants??
 

Rental investors typically focus on younger renters, age 20 to 29. A new renter is emerging, however: the baby boomer, age 50 to 64. Some predict the aging baby boomers will be the focus of apartment investors for years to come, since by 2020 the population aged 65+ is expected to increase from 37 to 55 million.

Editor Note: If you are a realtor, how can this impact your marketing efforts to rental property investors?

Compare this to the forecast for the Las Cruces metropolitan statistical area (MSA): by 2009, the 55-64 age bracket is expected to grow by 13.4%, to 41,342 people and the 65+ bracket to grow by 9.1% or 22,622 people.

The big question is: what will baby boomers do? Cash out the equity in their home, and buy two smaller homes (one next to the grandchildren, one in a warm sunny winter location), or buy a condo and an RV, or stay put?? Official estimates are that 27% are expected to be renters, or 17,270 in the Las Cruces MSA.

What type of rental housing will these baby boomers want?

A 1992 AARP survey found that most seniors prefer senior age-restricted apartments over age-integrated apartments. Senior age restricted apartments are usually for those 55 or 62+ and follow HUD regulations which allow for such "age discrimination".

Many offer communal meals, regularly scheduled shopping trips, and various activities for the residents. They usually are Americans with Disabilities Act (ADA) compliant, offering shower handrails, larger doorways for wheelchair accessibility, etc. whereas normally both the tenant and the landlord are responsible for removing barriers or providing auxiliary aids and services.

The landlord and the tenant may decide by lease that will actually make the changes and provide the aids and services, but both remain legally responsible.

Several types of age restricted facilities are currently available in Las Cruces:

-- Independent Living, with the ability to transition into assisted living

-- Assisted Living for individuals who cannot function in an independent living environment, but do not need nursing care on a daily basis.

-- Board & Care Home - Board and Care Homes are small residential family homes which provide 24-hour custodial care for four to six residents

-- Alzheimer's/Dementia or memory loss assisted living

--Skilled Nursing Facilities

--Continuing care retirement communities offers several levels of assistance, including independent living, assisted living and nursing home care.

In Las Cruces, a quick survey found close to 1000 age-restricted units available, ranging from shared semi-private rooms to two bedroom garden suites. The average Las Cruces income projected for these aging baby boomers ranges from $42,786 for 55 to 64, down to $35,009 for the 65-74 population. Will these people be able to afford a retirement community?

Subsidized senior housing may be the answer. Housing and Urban Development (HUD) offers housing choice vouchers which typically provide housing assistance for the standard rent less 30% of the renter's monthly adjusted income. These are available based on household total annual gross income.

Another thought to consider: if 17,000+ Las Crucens will be new renters looking for the amentias of senior living, we may have a shortage of housing. The New Mexico Housing Finance Authority (MFA) has helped us in the past, with the Montana Senior Village I complex which opened in 2001 and Village II, which opened in 2003, adding 132 units.

According to the MFA, it awarded more than $2.8 million in Housing Tax Credits to this project, which will generate more than $2.2 million in equity funding. Created by the state Legislature in the early 1970s, the fully self-supporting MFA has supplied more than $2.5 billion in affordable housing for families and individuals in New Mexico.

Clearly the needs of aging baby boomers will be a housing issue for the future. Las Cruces, with its reputation as a haven for retirees, may see more age restricted rental housing in the future.

Annette West, CCIM, MBA, CPA, is a Las Cruces Commercial REALTOR® and can be reached at AWest@AnnetteWest.com, http://www.annettewest.com/ or at 505-644-1634. She is a contributing writer for Landlord2Landlord.