SENIORS AS A TENANT PROFILE
Great real estate investors often acquire and manage their properties for a specific tenant profile. We’re thinking about student rentals, Rent-to-Own (often first-time home buyers), inner city (possibly working professionals), or suburbs (family rentals). This week we’ve been exploring an under-reported trend in Canada’s population, with an eye to how that impacts rental housing.
“In 2016, for the first time in Census history, Canada counted more seniors aged 65 and over than children under 15.” https://www.statcan.gc.ca/en/sc/video/2016census_agesex.
“Statistics Canada forecasts this trend will continue, reaching 22.5 per cent in 2030.” https://www.fraserinstitute.org/blogs/canadas-aging-population-what-does-it-mean-for-government-finances#:~:text=Statistics%20Canada%20forecasts%20this%20trend,22.5%20per%20cent%20in%202030.
There are a lot of implications when we consider that almost 1 in 4 Canadians will be over the age of 65 by 2030. We are ignoring most of these other issues today, staying focused on where these seniors will live.
85 % to 95% of seniors preferred to live in private homes (rented or owned is not specified) https://www.carp.ca/2022/09/26/aging-at-home/.
As rental housing providers, it is very clear that this age cohort is a significant proportion of possible renters. And they would generally prefer to stay in their current communities, if not their current homes. Since most landlords LOVE long-term tenants, I wonder how we can lean into marketing to renters who happen to be seniors?
This week, we participated in the Adaptiv ™ Home Renovation course, which is offered by the Canadian Home Builders’ Association. We learned that some homeowners need to sell their current properties, simply because of the stairs. We have personally seen this twice with private sales. These folks stayed within their community, moving to new condo’s. Literally no other home modification was required! No stairs, no problem!
Obviously every senior, and every tenant, is different. So it made us wonder, what other solutions are rental housing providers exploring?
We discovered one very forward-thinking investor in Hamilton, https://www.penguinliving.com/properties/warren-living. These are purpose build rentals for aging in place and/or accessible housing. There is an upper suite, a lower suite, and a garden suite on the same property. With Calgary’s new zoning regulations, this housing model will become possible. We love the idea of a small community on one property!
Accessible housing is clearly in demand; could this also be an affordable solution for seniors looking to downsize? In the course we learned that some seniors sell their primary residence as part of a tax planning strategy, or to release home equity, which then allows for more income/cashflow during inflationary times. What if it was as easy as moving down the street, into a new rental with great accessibility? In the course, we heard several stories of seniors who custom-built their own accessible new homes (not affordable for many, but speaks to the level of commitment to aging in a community, in a “regular” home).
There is another level above this strategy, but below long-term care facilities. Many people saw the recent article in the Calgary Herald, “Small Care Homes: An Idea whose time has come. Nov 4. (Sorry, you’ll need to look that one up with the new rules about sharing news). Small Care homes provide accessible housing for up to 12 people (often seniors). Alberta seems to be in the early stages of exploring this concept. We already have group homes for other populations, so it shouldn’t require rocket science, right?
As rental housing providers, how can we best serve our clients (tenants)? What business model(s) will be successful in the next decade, and ideally resistant to rapidly changing government rules (eg. short-term rentals). Accessible housing isn’t a sexy topic these days, but for long term real estate investors, maybe it should be?!
