Rental Apartment Building for Senior Citizens as An Investment Object in Finland

Tanja Tyvimaa and Karen Gible

ERES from European Real Estate Society (ERES)

Abstract: The purpose of this paper is to describe business opportunities for real estate investment companies in Finland. This paper focuses on rental apartment buildings for seniors. The research is the case study of the largest national provider of housing services in Finland; VVO. VVO owns approximately 38.000 rental apartments in some 60 municipalities. Almost 90% of VVO¥s rental apartments are located in growth towns and municipalities. In the 21st century, many residential buildings for seniors have been developed and marketed as a ísenior houseí. In this context, a senior house means an accessible residential building which is meant for citizens over 55 years old. Senior houses are not supervised by authorities; thus, types of apartments and service levels vary widely. Senior houses generally have meeting spaces and fitness centers for residents and some of them even have restaurants and nursing staff. On the other hand, there are those that have neither meeting spaces nor services. The study estimates business possibilities of rental apartments for seniors compared to ordinary rental apartments. The study takes into account investments costs, rental revenues and offering of housing services. An attractive living environment of senior tenants is examined, too. The data of the study has been collected by interviews. As a conclusion, the senior houses are profitable investment objects. The market situation of senior houses is sustainable because population in Finland is ageing rapidly. The demand of the senior apartments is steady and tenant relationships are longer than in ordinary rental apartments. The threat is that the good demand and supply involves housing developers which develop senior houses but do not offer any services. It increases the lack of confidence of tenants to the senior house concept.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2009-01-01
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