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IRVINE, CA-As GlobeSt.com reported earlier today, locally based data source RealtyTrac has released its list of top 15 retirement hot spots for real estate investing. Retirement hot spots were determined to have at least one-third of its population age 65 or older, and 40 cities nationwide were found to have at least 33% of the population in this category. Among these cities, 25 posted annual increases in median home prices, and 27 had a positive capitalization rate.
The statistics indicate that rentals in those markets generate a positive cash flow, according to the firm. Topping the list was the central Florida town of Dunnellon, where 38% of the population is retirement age or older and home prices jumped more than 31% in the past year. The estimated cap rate in Dunnellon is more than 10% based on the average rent for a three-bedroom home there.
Six other Florida cities made the top 15 list: Naples, North Fort Myers, Punta Gorda, Sun City Center, Venice and Orange City.
“Developers' appetite to construct housing aimed towards retirement-aged adults is growing again,” said Emmett Laffey, CEO of Laffey Fine Homes International, in a prepared statement. “They are well aware that this buyer pool will only increase over the next 15 years.”
In addition, RealtyTrac reports that buying real estate with IRAs and other retirement accounts is one way buyers can get an edge in a competitive market. “Given the combination of bottomed-out home prices and a still-tight lending environment, utilizing funds from a retirement account to purchase investment homes with cash—or at least with a large down payment—can give individual buyers a better change of competing in this tight housing market,” said Daren Blomquist, VP of RealtyTrac, in the statement. “Provided the investments are made with thorough research beforehand, this investing strategy also gives consumers a path to more quickly build their nest egg since all proceeds from the real estate investment—whether that be from rental cash flow or from selling the property—go directly back into the retirement account.”
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
