Baby boomers are aging, and we’ve been anticipating a wave of retirements for decades. At the onset of COVID-19, many Americans chose to retire early, and while an easing of some restrictions meant that 1.5 million retirees re-entered the workforce, renting to retirees is still a legitimate investment property strategy, and it’s easy to see why.
Retirees are the perfect tenants. They are quiet and not disruptive, they tend to do less damage to their units, and therefore the properties require less upkeep. In addition, retirees are typically on a fixed income and generally pay their rent on time. While they need some special considerations regarding accessibility, renting to retirees is generally an excellent investment strategy.
With that in mind, we’ve chosen five cities in the United States that are the best cities to retire in. We analyzed these best retirement cities based on 2022 statistics about local home prices, home cost per square foot, and the proportion of the population over 65. We also examined the factors that make these cities appealing to retirees, like crime rates, local taxes, and public transportation options.
Finally, we selected cities with real estate investors in mind, and we’ve weighed in on the medium rental cost and the average vacancy rate for each city.
1. Palm Coast, FL
- Median home listing price: $379,000
- Median home listing price per square foot: $215 per square foot
- Percentage of population over 65: 28%
- Crime per capita: 1.7%
- Sales Tax: 7%
- Public transportation: Paratransit (for disabled users)
- Average rent:$1,586/month
- Average vacancy rate: 1.4%
Palm Coast is located in a state that is well-known for its popularity with retirees, Florida. Palm Coast is a medium-sized city with an estimated population of 89,800 in 2019. Palm Coast is the largest city in Flagler County, Florida, and is a retirement-friendly city with an incredibly low crime per capita rate (just 1.7%) and moderate sales tax. Many retired Americans are already living in Palm Coast, with a hefty 28% of the population over 65.
While property in Palm Coast isn’t cheap, with the average home listings coming in at $379,000, you can be assured you’ll have a steady supply of tenants. Additionally, the average vacancy rate in Palm Coast is just 1.4%, which is very low.
Why We Like Palm Coast for Investors
We like Palm Coast for investors because, relative to some of the other cities on this list, the average listing price and average price per square foot are low. For example, when comparing Palm Coast to one of our other Florida picks, Cape Coral, the average list price is almost $100,000 lower, but the average rent is only around $400 lower.
Pro Tip: If you’re looking to rent our multiple properties to retirees, keeping your finances in order is essential. Baselane’s analytics tool for landlords can help you manage your units and grow your portfolio.
2. St. George, UT
- Median home listing price: $569,900
- Median listing price per square foot: $287 per square foot
- Percentage of population over 65: 23%
- Crime per capita: 3.5%
- Sales Tax: 6.75%
- Public transportation: Bus
- Average rent: $1,287/month
- Average vacancy rate: 4.37%
Located close to the southwestern border of Utah and not far from Zion National Park and boasting unusually warm and arid weather, St. George, UT, is the ideal place for a retiree looking for warm weather and proximity to natural recreation opportunities. St. George is a medium-sized city with an estimated population of 95,342, and 23% of that population is over 65, so the senior community is healthy and vibrant.
There are four post-secondary schools in St. George, UT, with a student population of 15,000 and 25,000, depending on the season. So, if you are in-between tenants, there are many options for short-term rentals to students. In addition, public transportation is available, with regular buses servicing most of the city. Finally, the average rent in St. George, UT, is $1,287, and the vacancy rate is within the healthy range at 4.37%.
Why We Like St. George for Investors
You should consider St. George, Utah, because of the decently sized student population. While renting to retirees is a good solid strategy, students can help bridge gaps in vacancies due to their transient nature and be a solid option for short-term rental flexibility. St. George has a decently sized student population, especially compared with other picks like Largo, which has a smaller population and no student rental base.
3. Largo, FL
- Median home listing price: $367,000
- Median listing price per square foot: $268 per square foot
- Percentage of population over 65: 26%
- Crime per capita: 6.3%
- Sales taxes: 7%
- Public transportation: Bus
- Average rent: $1,577/month
- Average vacancy rate: 6.5%
Located on the Pinellas Peninsula just west of Tampa, Florida, Largo is a medium-sized city with a population of 77,648, according to the 2010 Census. Originally primarily agricultural, Largo has evolved into a bedroom community with an easy commute to nearby Tampa. That said, Largo is the fourth largest city in the Tampa Bay area and is a popular place for retirees to settle down. About 26% of Largo’s population is over 65.
Property prices in Largo are moderate, with the average listing price a reasonable $367,000. Crime per capita in Largo is slightly higher than in the other cities we’ve mentioned, at 6.3%. In addition, the rental vacancy rate is 6.5%, which means Largo is a renter’s market.
Why We Like Largo for Investors
Largo is an excellent choice for investors because it has an excellent home price to average rent ratio. Largo has one of the lowest average listing prices on this list and good rental prices, and we’d choose Largo over St. George in this metric.
4. Cape Coral, FL
- Median home listing price: $459,000
- Median listing price per square foot: $266
- Percentage of population over 65: 23%
- Crime per capita: 2.5%
- Sales tax: 6.5%
- Public transportation: Bus
- Average rent: $1,944/month
- Average vacancy rate: 6.3%
Located in sunny southwest Florida, Cape Coral is known for its canals and manatees. This city has a population of 194,016, making it the largest city between Tampa and Miami. Due to its larger size, you can expect to pay more for a home here. The median home listing price in Cape Coral is $459,000.
While housing prices in Cape Coral are a bit higher than other cities on this list, they are still popular with seniors, and 23% of the population is over 65. In addition, crime rates in Cape Coral are low at just 2.5% per capita, and public transportation is amply available by bus.
From a rental investment perspective, the average rent in Cape Coral is $1,944. The average vacancy rate is also high, at 6.3%. A high vacancy rate indicates Cape Coral is a renter’s market, so you’ll need to ensure you offer an above-average product to your senior tenants.
Why We Like Cape Coral for Investors
Cape Coral is one of the biggest population centers on this list and is significantly larger than some bedroom communities like Largo or St. George. This larger city size can substantially benefit real estate investors because of the additional services available to retirees like public transportation and medical facilities.
5. Meridian, ID
- Median home listing price: $621,300
- Median listing price per square foot: $287 per square foot
- Percentage of population over 65: 13%
- Crime per capita: 2.5%
- Sales tax: 6%
- Public transportation options: Bus and paratransit
- Average rent: $1,689/month
- Average vacancy rate: 0.7%
As the second-largest city in Idaho, Meridian is one of the fastest-growing cities in the United States and regularly appears on lists as one of the best places to live in Idaho. With a population of 117,635 and uncharacteristically dry winters with little snowfall, it’s unsurprising that 13% of residents are over 65.
The cost of housing in Meridian is high, with an average listing cost of $621,300. But, the average rent is also higher than average at $1,689. In addition, the vacancy rate in Meridian is 0.7%, which is exceptionally low and indicates an opportunity for the right landlord to provide quality housing at a competitive price.
Why We Like Meridian for Investors
Meridian has one factor we love for investors – the low vacancy rate. Meridian has a lower vacancy rate than any other pick on this list, pushing it into a landlord’s market. This low rate ensures you’ll have a steady supply of tenants to fill your rental properties.
Final Thoughts
Renting to seniors can be an excellent real estate investment strategy to grow your rental portfolio. A retiree-friendly rental might command slightly less rent but has other benefits. For example, your vacancy rates will be lower, and you’ll enjoy lower wear and tear and maintenance costs. Any cities we’ve suggested above represent good opportunities to rent to seniors. Just do your due diligence and ensure a sufficient rental return on investment.
FAQs
Senior citizens represent some of the most vulnerable renters, and many must contend with a fixed income amidst rising costs. To that end, there are many government tax breaks for senior renters and homeowners. That said, there are far fewer options for landlords themselves. One of those government tax breaks is the Low Income Tax Credit. This federal program awards credits to state and local governments, who then award these tax credits to private developers to build and maintain affordable housing.
Renting to retirees can be a good income property investment strategy, but there are some considerations and precautions that you should take. First, you’ll need to ensure that your property is suitable for retirees. That means no stairs, plenty of handrails and other accessibility devices, and even options for emergency alert buttons. You’ll also need to ensure that the common spaces are suitable for seniors. For example, ensure there is room for a taxi to pull up in the front of the building and that exterior doors have automatic wheelchair access. Finally, you’ll want to ensure you have adequate liability insurance for accident slips or falls on the property.
Retirees are interested in properties that are accessible both from the perspective of the building itself and the location. Proximity to daily amenities like grocery stores, pharmacies, and medical facilities is essential, as is the accessibility of the property and units themselves. Choose a property that limits stairs within units and ideally has wheelchair-accessible options.
