Millennials and now Gen Z have been the target market for a lot of rental communities over the previous few years. Even for mom-and-pop landlords, making a single-family house or small multifamily unit resemble a well-equipped Airbnb to draw high-earning, youthful tenants has been a preferred technique.Â
Latest information suggests, nevertheless, that this strategy could also be overlooking an ever-growing part of the rental group: the 55-plus age group.
A Generational Shift in Housing
Not like youthful tenants, a lot of whom are digital nomads flitting between cities or younger {couples} saving to purchase their very own house, older tenants are sometimes former owners who’re uninterested in the pains of property possession—akin to growing taxes, upkeep, not having the ability to go away for weeks at a time—and searching for one thing secure and long-term. In different phrases, very best tenants.
In line with analysis from the Nationwide Funding Heart for Senior Housing & Care, based mostly on U.S. Census Bureau information and detailed in The Wall Road Journal, the fastest-growing age group of renters within the U.S. is the 55-and-older age group.Â
And a report from Point2Homes based mostly on U.S. Census information reveals that 2.4 million extra People aged 65+ have been renting in 2023 than in 2013—an nearly 30% improve, the most important of any demographic. The 55-64 section additionally skilled progress, though not as pronounced. It’s a development that’s shaping the nationwide rental panorama.
Why the Variety of Older Renters Is on the Rise
In line with The Journal, a number of converging causes are fueling the middle-aged rental increase.
Way of life flexibility
Proudly owning a single-family house is not sensible for divorcees and empty nesters. Renting permits for the power to maneuver to hotter climate, be close to grandchildren, and scale back taxes and different bills.
Keep away from property upkeep
The trouble of property upkeep is among the most compelling causes to ditch a single-family house, particularly an older one. The comfort of calling a landlord to repair any points might be extremely interesting.
Monetary flexibility
Promoting a long-term house releases capital, providing liquidity and with it, the chance to journey, pay for healthcare, make investments, or have interaction in different leisure actions.Â
Group and facilities
Massive-scale builders have change into more and more cognizant of the rising 55+ rental age group and, as such, have been providing “lively grownup” rental communities, with gyms, gardens, and social areas. Connection and engagement are a giant draw for older tenants, particularly those that have devoted their lives to elevating households or are single.
Regional Variations: The place the Older Rental Demographic Is Rising Quickest
Though the rising 55+ rental development is nationwide, some areas are experiencing sharper will increase than others. For instance:
- San Francisco Bay Space: In 2023, renters aged 65+ made up over 13% of renters, in contrast with round 10% a decade earlier.
- Pittsburgh: The share of renters 65+ has climbed from 16% to 18% in a decade.
- Twin Cities: Greater than 15% of renters are aged 55+, sparking a increase in “lively grownup” communities in Minneapolis and St. Paul.Â
- Portland, Oregon: Scenic Portland has seen its proportion of 65+ renters improve from 9.6% to over 12% in a decade.
- Texas metros: Maybe no different metropolis has skilled the explosive progress that Austin has, with an 81% improve in senior renters between 2013-2023. Dallas-Fort Price was up 66.5%, and Houston was up 60%.
Methods to Lease to Older Tenants
To draw and retain older tenants, understanding their wants is essential. These are useful issues for landlords to remember, whether or not you personal an house complicated or a single-family house.
Stability and safety
Nothing will deter a renter on a set revenue or nearing retirement greater than unpredictable lease hikes. Mother-and-pop landlords not beholden to company lease will increase ruled by rental software program applications akin to RealPage and Yardi Methods stand to profit on this state of affairs.
In line with U.S. Census information, practically half of renter-households are cost-burdened—spending over 30% of revenue on housing. When your revenue is restricted, stability is crucial.
Providing lengthy leases of 12 months or extra with the assure of predictable, prearranged will increase will put an older tenant’s thoughts relaxed. These on this demographic wouldn’t have the power or inclination to maintain transferring or be financially burdened. Transparency triumphs over short-term profitability.
Be truthful and pragmatic in your screening
In case your tenant has retired, your screening course of will differ in comparison with that of youthful, full-time workers. Ask older candidates for details about their pensions, Social Safety, or retirement financial savings.Â
Nonetheless, asking for co-signers for impartial older singles might be humiliating and should even deter good tenants. That stated, dangerous tenants are available in all ages, and it’s important to conduct due diligence with credit score studies and revenue verification, simply as you’d with any tenant.
Accessibility issues
Making your rental elderly-friendly doesn’t imply turning it right into a medical facility. Nonetheless, easy additions akin to rest room seize bars, low/no-step entrances, well-lit public areas, strong safety, and common snow shoveling or underground heating pads are considerate touches that provide peace of thoughts.
Responsive upkeep
No tenant, significantly an older one, needs to maneuver right into a rental to really feel like they’re dwelling in a dorm room, or that they’ve to fret about issues getting mounted regularly. Be punctual with any upkeep points. A giant a part of the attraction for older tenants to maneuver right into a rental will not be having to fret about upkeep.
Value for the long run
Renting to older tenants doesn’t essentially imply reducing your rents dramatically; as a substitute, it means providing long-term leases that present worth. Slightly than renting on the high of the market, pricing slightly below, with the settlement of predictable lease will increase, will save a landlord cash in the long run by stopping tenant turnover.
Alter leases to accommodate Social Safety or pension checks
Usually, Social Safety checks or pensions usually are not all the time paid on the primary of the month. Supply some leeway in your leases to accommodate this.
Permit for tech challenges
Not all older tenants are tech-savvy. Permit for tenants preferring conventional types of communication and lease funds, versus those that conduct transactions through their smartphones.
Take into account pets
Many older tenants stay alone, and the corporate of a pet helps them each emotionally and bodily. Be cognizant of this when crafting your lease, and also you’re more likely to have a bigger pool of potential older renters.
Closing Ideas
Landlording is a service enterprise, and with older tenants, property house owners and administration corporations want to supply greater than a spot to stay. Stability, safety, considerate design, immediate upkeep, and clear, respectful communication are important for any well-run rental property, however when renting to an older demographic, it might imply the distinction between protecting a long-term tenant and dropping them to the competitors.
Older tenants are more likely to spend extra time at house than youthful ones, particularly in colder climates. Guaranteeing your own home is draft-free and your HVAC programs are in impeccable order is paramount. Keep on high of this stuff, and also you’re more likely to have a tenant who shall be comfortable to name your house house for years to come back.
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