What Do Boomers Want in Retirement Housing?
First, to define a new class of housing that is beginning evolved. I call it a “future primary residence” (FPR). Residential real estate is basically divided into only 3 simple types: primary homes, second homes, and investment properties. The new fourth property type fits somewhere 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, amenity laden, year-around homes. FPR’s are unique because they are purchase with full intention of being the homestead, and suddenly the family homes or primary residence that was near work, becomes a transitory waypoint, and no longer home. The empty nesters might as well put the for sale sign in the ground, they are intent on moving onward as soon as possible.
Around age 50, statisticians tell us, is the age at which most people purchase a second home. In a survey of second homebuyers conducted by The National Association of Realtors found that the motivation to own a second home was often for both investment and for personal use. Being that they cannot use the FPR or second home full time for a number of years, renting it makes good financial sense.
When a 50-something buys a condo in Florida for a second home, but proceeds to rent it out for 45+ weeks of the year isn’t it an investment property? The motivation to buy 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 the 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 for a new category of housing, this condo was likely a considerably upgraded residence with granite counters, large master suite and likely an elevator (even in single family homes) for future concerns with mobility in old age. Investors simply do not add these kind of amenities to a mere rental property. The buyer’s goal in renting is often to cover expenses and hopefully amortize the debt to build a retirement nest egg. Something I will call from here on out a Best Egg. The National Association of Realtors, one of America’s largest trade organizations with over 1.2 million members, has studied the trends of the boomers in great detail. Boomers will have prioritized these qualities in housing for retirement Besting:
O Walk-able communities
O Luxury and quality
O Amenities not size
This is from a new book called: “Besting – Better Nesting” http://www. betternesting. com