The last thing any third-party property management company wants to see inside a unit is a Hangovermovie sequel produced by irresponsible renters. People who don’t own their homes don’t always treat a rental property like they would want to be treated.
The Downsizing of America charge led by baby boomers perhaps opens opportunities for landlords to have their rent and keep more of it, too, in the owners’ pockets. These are presumably a more responsible lot – they’ve raised their children, achieved their corporate standing and climbed their social ladders – and likely won’t damage property, at least intentionally. They’ll probably leave the place much like they found it.
These types of renters are also more apt to take out renters insurance, suggests industry research.
The changing demographics of the leasing industry are creating more demand for renter’s insurance, according to an IBIS World study released last fall. The new breed of resident has transformed in the last five years from younger, more budget-conscious to working professionals and middle-aged consumers. And, says IBISWorld, they are more likely to hold some sort of property and casualty insurance.
It’s not just baby boomers trading in suburban estates for a smaller dwelling that doesn’t require the headaches of home ownership. New renters who once owned homes have emerged from the recession, and have learned to appreciate insurance – even if it was at behest of the mortgage company.
Because of these factors, the renter’s insurance industry has realized an annualized growth rate of 4.5 percent in the five years to 2013, says IBISWorld.
It only supports why property managers have another reason to embrace the evolving aging of population. Baby boomers are entering their golden years and appear to be hanging around longer than previous generations. The rate of people over 65 and 75 is growing, and becoming a desirable demographic for landlords.
Marketing strategies directed toward baby boomers seeking to shed home ownership have been discussed at leasing industry conference tables. At January’s National Multifamily Housing Council meeting in Palm Springs, conversations rang of the urbanization of baby boomers. “The Boomers are Coming! The Boomers are Coming!” harkened an NMHC follow-up blog.
Reports showed that 30-35 percent of new construction is being consumed by empty nesters, and that research shows that 60 percent of renter household growth is from people 55 and older.
“We found through our research that the market is absolutely there and they are downsizing,” said Ricardo Rivas, CIO of Allied Orion Group, in NMHC’s recap.
This is a unique demographic that demands attention and nurturing, says best-selling author Dr. Ken Dychtwald, who addressed industry leaders at a special executive session in Palm Springs. Today’s generation of older residents is much different, and landlords should understand that.
“Almost everything we know about old people is yesterday’s old people,” he said in NMHC’s post. “If you build housing for the last generation of old people, you’re probably missing the mark.”
One reason is that baby boomers are sticking around longer and are refusing to grow old the way their parents did. The idea of retiring and living on the family farm isn’t as appealing. Also, because they are living longer – the average life expectancy for a 65-year-old is another 18-20 years – more than a third who are 65 or older have a part time job. Many want to re-invent themselves and learn new things, and they want to live the rest of their lives on their own terms.
The apartment industry, Dychtwald said, should capitalize on the longevity marketplace. It stands to reason that single-family property managers should, too.
As some see it, that creates a golden opportunity to embrace a more responsible resident. Residents who desire fulfilling lifestyles and invest in themselves are good assets for the home leasing industry.