Even though the market has delayed many from moving ahead with plans to sell the family home, baby boomers are a red hot market for investment properties.
A national survey of Coldwell Banker agents found that 87 percent of 1300 agents and brokers polled have Baby Boomer clients who already own or are looking to own an investment property. Some 22 percent of agents report that at least half of their Boomer clients either own or are looking to own such properties.
“The baby boomer generation has driven the U.S. economy for years, and like many Americans, they may be anxious about their next real estate decision,” said Jim Gillespie, CEO of Coldwell Banker Real Estate. “I know baby boomers are a very diverse group and cannot be described in generalities, but our survey clearly indicates that those boomers who are financially secure are actively seeking to buy their retirement home, or a second home, and they are taking advantage of the opportunities and value available in today’s market.”
“Those who can afford to pay all cash for a property at 30 to 40 percent below what it was worth actually have a positive cash flow when they rent it out,: said Coldwell Banker President Jim Gillespie. Gillespie is so strong on the importance of encouraging greater investment in residential real estate that he’s in favor of extending the depreciation period for real estate investments.
Bob Hamrick, chairman & CEO at Coldwell Banker Premier Realty in Las Vegas, said investors in his market, which may lead the nation in single family rentals, are buying properties based on the rental income they will generate, not necessarily for resale potential.
“There’s almost no timeline for resale. Investors are looking at a 10 percent or greater return on their money that they can’t get anywhere else, knowing that down the road they’ll be able to sell a home they bought for $150,000 but someone else before them paid $450,000 for,” he said.
Families forced from their homes by defaults in the Las Vegas market are looking for single family homes and their only choice is to rent. Over time they can repair their credit and save for a down payment to qualify again as buyers, he said.