Investing Assets & Markets Real Estate Investing Landlord Tips Pros and Cons of Buying a Rental Home in a 55+ Community Is investing in a rental property in a retirement community right for you? By Erin Eberlin Erin Eberlin Erin Eberlin is a real estate and landlord expert, covering rental management, tenant acquisition, and property investment. She has more than 16 years of experience in real estate. learn about our editorial policies Updated on September 13, 2022 Fact checked by Hilarey Gould In This Article View All In This Article Pros and Cons Pros of Investing in a Retirement Home Rental Cons of Investing in a Retirement Home Rental Frequently Asked Questions (FAQs) Photo: Chris Ryan / Caiaimage / Getty Images Retirement communities offer specific amenities that cater to the 55+ age crowd. Investing in a home in one of these communities has its pros and cons. While you are able to target a very niche group of people, you may be limiting yourself, as these communities are much more common in certain areas of the country. Consider the pros and cons before investing in this type of property. Pros and Cons of Buying a Rental Home in a Retirement Community Pros Desirable area and amenities Maintenance often included Specific target market Quiet community Cons Monthly fees Niche market Limited investment properties Pros of Investing in a Retirement Home Rental People retire every day, and they're looking for the ideal place to spend their leisure years. There are several positives to buying a retirement home as an investment property. Desirable Area and Amenities The first perk of investing in an over 55 community is that the property is usually in a nice area—near the beach, in a warm climate, or somewhere else that is usually desirable. Great location and weather are selling points in and of themselves. In addition to being located in good areas, retirement communities usually have many activities nearby, as well as amenities in the community, like a pool or gym. There are numerous amenities available in retirement communities. From exercise classes, educational courses, and recreational activities, there is always something to do in the community. Maintenance Often Included When buying or renting in a retirement community, monthly fees often cover homeowner maintenance. Every community will differ, but these fees can cover everything from housekeeping to exterior yard-work. Having outdoor space, but not having to maintain it, is attractive to this aging population. Specific Target Market When you invest in a retirement home, you have a very specific target market. Since most retirement communities require residents to be 55 or older when looking for buyers or renters for your property, you know who you are targeting and you can develop a marketing plan which will appeal to this demographic. Quiet Community Many retirement communities are gated and are not accessible to street traffic. In addition, the average home size is smaller so there may only be one or two people living in each house, so the noise in the community is likely lower. Note Fewer people in the home and no children because of the age limit mean less wear and tear on the property, which can help you save money on renovations or repairs. Cons of Investing in a Retirement Home Rental There are also negatives to consider when purchasing a retirement home as a property investment. You are limiting yourself to the 55+ age group of the population, which takes away anyone under that age as a potential renter or buyer. Monthly Fees While there are some communities that don’t require it, in most retirement communities, you will have to pay a monthly fee for the retirement home. What the fee covers will vary by community, but it can include utilities, yard maintenance, and housekeeping, for example. As an owner, you will have to pay this fee regardless of whether you are able to find a renter for your property. Niche Market Buying investment property in a retirement community limits your potential buyer or rental pool. You usually have to be at least 55 years of age to reside in the home, so this type of investment immediately cuts out a large portion of the population. Limited Investment Properties Retirement communities are not found in every neighborhood. As spoken about above, there are specific areas where these homes are commonly located. In addition, inside the actual community, there are only certain types of investment properties available. These are usually single-family homes or condominiums. Frequently Asked Questions (FAQs) What should you look for when buying a retirement home? When buying a retirement home that you want to rent out to someone, consider your finances, the location of the house, amenities, fees, community, and costs to maintain it. Look at the price and compare it with other retirement homes in the state. You'll also want to consider how long you plan to keep it and if it'll be worth the return on investment. What should you know before buying a rental property? Before buying a rental property, you should know that it may take more time than you expected to make a profit. You'll be responsible for the maintenance and updates to the property, which could eat away at the income you make from the property. Work with a realtor and consult a financial professional to make sure it's the right move for you. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Osprey Cove. "South Jersey's Premier Age Restricted Community." SeniorHomes.com. "The Cost of Living in a Retirement Community." State of New Jersey Department of Human Services. "Housing Options for Senior Citizens."