Baby boomers retiring

[mar]

Hello everyone,

It seems to me that one principle taught by REIN is that large population shifts will spur demand for real estate, thus increasing overall values (ie oil sands). I haven`t seen much discussion about the effect of baby boomers entering their retirement years. Surely this massive cohort is going to impact real estate begining in the next few years. I believe Don had some comments on this, but haven`t been able to locate. Can someone provide us with a link and/or disscuss.

Thanks in advance,

Marcus Shaver

 

[joeiannuzzi]

If you want some very extensive explanations on baby boomers on equities and real estate markets, visit the website www.hsdent.com. Many of Harry Dent`s books are available at Chapters.

 

[Thomas Beyer]

QUOTE (mar @ May 17 2008, 08:04 AM) Hello everyone,

It seems to me that one principle taught by REIN is that large population shifts will spur demand for real estate, thus increasing overall values (ie oil sands). I haven`t seen much discussion about the effect of baby boomers entering their retirement years. Surely this massive cohort is going to impact real estate begining in the next few years. I believe Don had some comments on this, but haven`t been able to locate. Can someone provide us with a link and/or disscuss.

Thanks in advance,

Marcus Shaver

ANY recreational real estate play over the last 3-6 years has been baby boomer related: Canmore, Shushwap, Vancouver Island, Kelowna, Bear Mountain, Uculet, Mexico beachfront, Scottsdale, Florida, SC, NM, Las Vegas ..

The trick is to make sense of it as a LONG TERM HOLD investment ! It is in most cases negative cash-flow as you can`t rent year round, in many cases it is very pricey with some but more and more questionable upside .. so a MUCH HIGHER RISK investment .. will a condo in Canmore (where I happen to live .. as a "typical" baby boomer .. as I was born at the peak of the baby boomer years 1959) go from $800,000 to $1,000,000 .. yes .. eventually .. but it`ll be a while .. and with a $200,000 downpayment and a $600,000 mortgage + taxes condo fees + rental management fees it may not make the best investment for the $200,000 invested ...

type into google "real estate" "recreational" .. and I bet you get a gazillion hits ..

We just hired a P/T sales person for our rental pooled condo project .. and she also works P/T selling condos in Canmore .. actually playing solitaire @ $20/h as nothing is moving in that new Canmore complex .. and units sold 2 years ago coming ready now (2 years after the initial contract was signed) are now selling for LESS than 2 years ago ..

go figure .. recreational properties is a VERY risky game .. we prefer boring rental pooled condos or apartment buildings in smaller or larger URBAN centers where the average "Joe" lives and rents .. and if you hold them condos or them buildings 3 or 5 or 10 or 20 years .. you`ll do AWESOME .. but: you have to HOLD 3 or 5 or 10 or 20 years .. and that implies: cash-flow has to be break even or better to HOLD !!! .. and that means 100 to 150/door .. and not 350 to 800/door !

 

[mar]

Thanks for the replies Joe and Thomas.

Boomers have driven mega-trends their entire lives:

"In each decade of the 20th century, this segment of the population created sea changes: the diaper industry in the 1950s, fast-food restaurants in the 1960s, real estate in the 1970s, media in the 1980s, and investing in the 1990s"

College town life

This site above talks about the trend of boomers searching out University towns for their retirement. They are cashing in their big city real estate for more affordable options elsewhere. University towns offer education, active lifestyle, culture, youth and excellent healthcare. Many will have lived in these smaller towns before while attending school and will feel comfortable relocating.

It makes sense to me. Demand for real estate will (and has) been spurred by developers creating adult lifestyle communities (and golfcourses). More business will migrate to these towns to provide services to this cohort.

Has Don written on this?

Thanks,

Marcus

 

[CarlaJohnson]

There has been some discussion at REIN meetings about retirement areas. The simple explanation is property values go up in areas with a combination of in-migration and increased incomes. Retirement areas have in-migration, but not increased incomes. Retirees live on fixed incomes, so they alone will not push up RE values.

Specific projects focused on retirees may be an option. There is a lovely apt. building in my neighbourhood. They only rent to the older demographic and it is such a nice place. They hand out candies on Hallowe`en, organize spring yard sales and they keep a very nice garden. People are lined up to get in there. You never see a "For Rent" sign out front. I would be proud to run that kind of business.

All the best.