Investing in real estate in senior communities can be a very safe investment! You can watch your investment grow as time goes on. The senior communities are slow to drop in value. There are many seniors that actually look for ways to invest their money so they can get a safe rate of return from their investment.
Most properties and senior communities are purchased with cash. Some people who have nice incomes who would like to purchase the home with financing, usually put 20% down payment to avoid paying private mortgage insurance. Most properties bring 4 to 5.5% cash on cash return plus any appreciation when good choices are made.
Private mortgage insurance is very costly in today’s market. When you avoid paying private mortgage insurance, the house payments can be down to a minimum. With today’s interest rates, they become quite attractive and stretch the investment dollar.
Seniors make great tenants. They take care of the home. They don’t do intentional damage. They don’t have children doing damage to the property. Most seniors that have pets take better care of the home with pets than some people do without the pets. A senior knows the rent they can afford and they also know the length of time they would like to have a rental property. It’s very often that you’ll find a tenant wanting more years committed to a rental than the landlords are willing to give out. When owning a rental property, when the property is vacant it is losing money to the investor in the leasing market. You can avoid most of those losses and down times with good advanced planning.
There may be some advantages to buying rental properties in senior communities where seniors would like to live by themselves. If they use some of their investment dollars they have invested in real estate to buy homes in the area, they can develop a home where they like to stay in after a few years. People could sell the home they are currently living in, using their exemptions for taxes when they sell a personal residence, and then put that money in an investment that entirely devoted to income for them and not wasting it on real estate when it could be done with before tax dollars.
Changes in tax laws recently have made it to the point where people that used to finance their home for tax reasons may not need to now. There are not as many people needing to do so at this point in their life. The seniors that have deductions to go long form on tax returns also like to have a mortgage payment to assist in their tax write-offs and offset their income.
Senior communities of today have investment clubs with people who are very successful. They talk to their friends and family and they’re acquaintances about how to make investments that work for their long-term and their retirement years. Most people find it very stimulating to find a crowd that is grown and savy that have learned to invest dollars to make their investment dollars in their senior years the best years ever!
Many times when talking to friends who are successful you find out what might work for you and your time of need to help stretch those dollars. When people like their friends and they find successful instruments for them to make money. It’ll further their income, they’ll share with their good friend some of those secrets. Sometimes even better, they’ll share with you the mistakes they’ve made so that you don’t have to make the same mistake. Get some input from professionals for all avenues and then see what is right for you