A number of demographic factors contribute to potential for US property investment. One of them is the older generation. The so-called Baby Boomers rank as one of the largest population groups in the country and as they approach retirement, they look at relocation. Areas popular with retirees tend to be in warmer climates with favourable tax conditions so it’s no surprise to find Florida at the top of their preferred locations.
Boom in retirees
A recent report by Realtor.com looked at the phenomenon of retirement hotspots in the US. Among Baby Boomers (born between 1946 and 1964), around 50 million have yet to retire. As a result, over the next decade some 10,000 will retire every day and by extension, probably think about relocation.
As Realtor.com points out, this has huge consequences for the US property market. In 2018, around 1.2 million Americans aged 55 or over moved from one state to another, a record figure. Investing in property in an area popular with retirees therefore has significant potential.
On the must-have list
Common denominators in the top retirement locations in the US include walkable locations and tourist friendly resorts. Several of the most sought-after areas also boast a warm climate and are on the coast.
Affordability of US property also ranks as an important consideration. Today’s Baby Boomers have less in their retirement savings than previous generations. According to Realtor.com, they have saved an average of US$209,000 while a third has no savings at all.
Florida most desirable of all
Given the relocation criteria for retirees, it’s no surprise to find that the Sunshine State tops the rankings for preferred retirement locations. Punta Gorda in Southwest Florida is the most popular with Cape Coral, also in the southwest of the state, hot on its heels in second place.
The Punta Gorda area in Charlotte County appeals to new retirees because of its “small-town feel” and strict building codes introduced after the devastation wrecked by Hurricane Charley in 2004. The metro also ticks the box for US property affordability since median prices sit at US$275,000. The lack of state income tax in Florida also counts in its favour.
Cape Coral in Lee County enjoys warm weather and a coastal location, both on many retirement must-have lists. The metro is particularly popular with retired veterans since it’s home to the VA Hospital. Median list prices in Cape Coral come in at US$299,100, higher than Punta Gorda but below those in Miami.
Land investment potential
Baby Boomer retirees also focus on medium-term property purchase and not all retirees buy homes. The Realtor.com report reveals that many look at land purchase with the view to building a retirement home on it for the future.
Buying a plot in Southwest Florida is an attractive proposition. Land represents good value and many plots enjoy prime positions in established communities in coastal locations. Englewood near Punta Gorda in Charlotte County is one such example and land in the area has seen considerable interest from US property investors in recent years.