It can be good to find a profitable niche in the rental business. One that I've decided to incorporate into my business is retired seniors. Here's my logic:

* The boomers are retiring at the rate of thousands per day.

* Financial reports say that about 90 percent of them have little retirement money. I personally think that number is wrong (from observation). I think more like 60-70 percent. The difference, to me, depends on where they live, what they did, and more. Still, there are many who don't have a lot.

* Many cannot afford high taxes in prime areas.

* Many are downsizing.

* Some just want a less expensive place in a smaller or vacation area.

So, here's where and how I'm approaching this opportunity:

* I choose, at this time to live in a vacation area (Northern Michigan). Many retirees WANT to live in this area.

* There are MANY low priced places nearby (off water, vacation cabins, second homes, mobile homes) that need repairs and can be had for bargain prices. As I travel, there are lots of places all over like this, so it can be done almost anywhere except high priced areas (coastal cities, desirable cities, etc).

*This is ready made for rehabber like me.

*So I buy (mostly mobiles on land and small ranch houses )then rehab them into 2 master suites with bath each and a common LR/DR/Kitchen. This rehab work usually costs about 8-15K, depending on condition. Add a ramp if necessary, set it up with grab bars, handicapped style (this is not that expensive if you are redoing it anyway).

*Each suite can and does rent for $500-550 a month. So a place that is purchased and rehabbed for about $25K then returns about $1000 a month.

*The retirees usually stay a long time.

*They don't generally trash the place or make trouble.

*They usually pay their rent on time.

What's not to like?

To me, it beats renting to young people who work sub $15 an hour jobs and prefer to party and raise heck and are higher probability for tearing a place up.

Richard,

AllyM,

I don't charge the high rents that the retirement homes do. Mine are generally about $500 a month.

Sometimes, the local housing authority here has their rentals available that they own (they have about 75 or so) and in these the tenants pay 30 percent of their income. There is about a 2 year waiting list to get one, so the housing authority makes deals with landlords. They have price limits but currently those are actually higher than what I charge. All units have to pass their inspections, just like section 8 places. (It's now not politically correct to say Section 8. They use a different term but it is the same thing.)

One thing I've seen here is that the housing authority here used to be mainly for low income seniors, but during the 2008-2016 era, this was changed to any low income "applicant". Then the drug people and the deadbeats started moving in and things went downhill quickly.

One thing that most of these types have in common is their utter contempt for rules and standards and regular decent people.

So it's pretty easy to screen them out. Evictions, arrests, junk and trash everywhere (thanks Brad 20K for the 2 minute visit tip), drugs, screaming fights, dead cars and more.

You are right about many of the retirees going south. Some come back though and some like the snow, the changes of seasons, and the life up north. They are the ones I want.

We heard a pitch for retirement homes a couple years ago at the MR LL conference. Some of the pros:

seniors don't throw loud, drunken parties.

They don't punch holes in the walls.

They go to bed early.

I like senior citizens as well. Generally, the drama of their youth is behind them, and they're more stable than those who are 30-40 years younger than they are.

The two problems I run into are fixed incomes and failing health. When the hospital expenses start coming in--- it definitely disrupts their ability to keep up in a timely manner.

If that's the one I'm think of they usually had bigger homes that were converted to accommodate seniors and it sounded like it could be lucrative. The market was right for what I would have had to do to complete in my town.

I think I could however do what Richard is talking about. I may need to look around and see what's available at a few lakes in the area. I believe the key would be having a separate bathroom for each person. And pairing up the personalities for each home.

I look at a shabby little 4 studio apartment building in a decent enough area. Maybe once it was a motel? If it comes on the market, I might consider it.

Clean it up really cute, paint all the apartments lavender inside, put a small dog fence in the back of each one, and declare it to be senior housing.

I think it could be kept full of good quiet tenants.

Interesting to hear, keep hearing more success stories related to the senior living sector.

I had no end of troubles with the renter / drug demographics in our town until I switched to 62 plus senior living. Overnight being a LL was almost pleasureable. Instead of late payers and drama I had single seniors who paid and weren't problems. My life went from fighting drug dealers to helping an 80 year old change her oxygen tank.

At one point when my mother needed nursing care and I was paying like $7,500 a month, I looked into opening an assisted living in my apts. The money looks potentially huge. But the staffing and liabilities might present challenges so we didn't persue it.

I marketed our place as "Affordable Living for Active Seniors." You need proceedures and clear policy in place to ensure smooth transitions to assisted living. You need good emergency contacts and you have to watch for signs they are becoming unable to care for themselves properly. Otherwise it's pretty stable.

I sold it just over a year ago, before my cancer diagnosis because I was so very sick without knowing it and just didn't have the stamina to run it anymore. Now that I'm almost back to my former healthy self I'm still glad I sold as the neighborhood immediately re-degraded without my constant (iron fisted tyranny) attention. But I feel sad for my former tenants. All but one has moved on. I drove by a few days ago to see young tweaker - dealers hanging out in the parking lot again.

Our town now has 6 large assisted living facilities. Our main business is retirees and tourists. There's some agriculture and gold/silver mining. Everything is mostly aimed at seniors, but health care is horrible and overwhelmed. You have to go to Vegas for a hang nail.

The new homes here are ALL designed for boomers downsizing to 1,200-1,600 sq ft homes, mostly with giant "toy" garages for motor homes and boats. I even have my first three car garage.

We have a LOT of low income seniors in our area. I would say the majority of our homeless are seniors. We get quite a few old hobos in the winter. It's truly shocking. Most I'm sure recieve govt money but not enough to pay rent. The VA has a program for vets, but there's not much more help.

You need to look into all that before switching to seniors. People are moving to our area to retire, but in other regions many seniors are retiring in place, so knowing your market is important. Anyway I think it's a good business option if your demographics fit.

Deanna, TX,

I've found that most seniors, if they have dogs, these dogs are generally smaller, under 30#. I haven't had any problems. Cats are also generally no problem.

Please keep in mind that my units are basic, class C units, so I don't worry nearly so much. If they were class A or B units, I'd have to be much more careful.

Floors are cheap and sealed. Trim around doors, etc. is cheap 1x3 stained wood that only costs under $2.00 for an 8 foot piece.

If I do the 2 minute visit before I agree to rent and their place reeks of cat urine or I see piles of #2 on the floors, that's a big no.

Senior renting is a very regulated business. Somebody mentioned bathrooms for seniors above, and yes, the rules will drive you nuts.

I've converted a few homes into RCFEs (residential care facility for the elderly) for other operators...a lot of regulations and details.

You should operate a Senior Housing Project in Los Angeles, where your bribes to the City Councilmen will make you rich! Here is how it works. You lie and say that 20% of the units will be rented to Seniors on assisted living income such as Section 8. And all of the new renters will be over 62 years old. Your rent to the first timer's will be at the low end.

Then when you screen for tenants you pick the one's who are sick and on the fast track to leave this earth. The City, after bribes have been paid, will forgive a major part of your property tax for the first 10 years and give you a interest fee grant that never has to be paid back. We are talking about the grant being large enough to cover your down-payment.

Then when the senor kicks the bucket, you the can rent to anyone who will pay you top market rents. The only thing is they have to be elderly -- over 55.