Moving closer to family, starting fresh in a new place, and downsizing with nearby amenities, the number of baby boomers who are choosing to rent instead of owning a home is on the rise.
From 2007 to 2017, individuals older than 60 who rented rather than owned their homes rose by 43%, according to RentCafe, a nationwide apartment listing service. This increase is expected to continue and will have an impact on the multifamily landscape, so it is important to understand what appeals to this generation who value loyalty and authenticity.
Born between 1946 and 1964, baby boomers represent the second largest segment of the adult population—just behind millennials—and have money to spend. According to the Federal Reserve, boomers control more than half the wealth in the U.S. This is significant when determining what this generation is willing to spend for features in a home.
J Turner Research, the leading market research company in multifamily, surveyed close to 24,000 residents nationwide in 2019 and reported its results in The Next-Gen Renter: 2020 and Beyond study. Twelve percent of its respondents represented baby boomers with an average age of 62.24 and paid an average monthly rent of $1,350. J Turner concluded that baby boomers desire a modern and aesthetically appealing apartment home. They place a premium on features and amenities that promote a convenient, social, and holistic lifestyle. And baby boomers are willing to pay a premium for some of these amenities.
Here are key trends in the way baby boomers approach apartment renting.
Hardwood Floors Are Most Valued
Baby boomers seek space and luxury in their homes. Boomers are willing to pay the highest percentage of their rent for hardwood floors; in fact, they will pay nearly 3% more in rent for this feature. This generation will pay up to 2.6% more for a large balcony, big enough to accommodate plenty of seating. Third on their list: a large bathroom with a glass shower stall.
When it comes to design upgrades, the boomers’ preferences are aligned with those of the younger generations. Gen Z, millennials, and Gen X all expressed willingness to pay additional rent for the same top three upgrade options, though in a different order.
Concierge Services
Some multifamily companies are experimenting with the concept of value-added services that are on-site and paid for by the resident. The services include dog walking, house cleaning services, dry cleaning pickup and delivery, grocery delivery, and car- and bike-sharing programs. Our study indicates little enthusiasm for these concierge services among renters across generations. On a 10-point scale, baby boomers showed most enthusiasm for grocery delivery at 3.05, followed by house cleaning service at 2.79, and dry-cleaning pickup and delivery at 1.99. Of course, many respondents already may use these services independently and prefer they remain independent from their monthly lease payment.
Amenities: Health and Social Preferences
Many boomers prefer a lifestyle that aids holistic and social living. This cohort rated a well-equipped gym as a priority (49%), followed by wellness classes such as yoga, meditation, and nutrition (35%). Exercise classes such as Zumba, kickboxing, and spin classes were a third favorite at 16%.
In fact, their social life revolves around fitness, with baby boomers preferring wellness classes (yoga, meditation) for community events, followed by holiday events, pool parties, and cooking classes.
Not Willing to Pay for Packaging Solutions
While baby boomers are willing to pay a premium for some apartment features, they are prudent with their money. Three-quarters are not willing to an additional fee for e-commerce package delivery solutions such as 24/7 smart-enabled package lockers, refrigerated lockers, and in-unit deliveries. This may be because renters expect management companies to provide solutions for package delivery without any additional cost to them.
Smart-Home Amenities: Convenience and Cost Saving
When it comes to smart-home amenities, baby boomers value convenience and cost savings. They are most interested in a community app where they can pay rent, reserve amenities, receive community event alerts, and view information about the community in one place, at their fingertips. For a generation that spends more than five hours a day on their smartphones, the interest in this feature does not come as a surprise. Next in line are Energy Star appliances, followed by smart thermostats.
Overall, baby boomers are looking for a pleasant living experience that supports an active and social lifestyle, and an elegant space to call home. And with the strongest financial backing of the generational cohorts, multifamily communities and developers have multiple revenue streams to explore in order to appeal to this generation.
