Top 10 Reasons To Invest in Senior Housing

It’s not what you know, it’s who you know

The senior housing industry is no stranger to change, especially in recent years with shifting housing models and the pandemic, of course. Factors such as shifting technological paradigms, evolving care models, and more sustainable housing are helping to transform the industry, which is excellent news for potential investors. In fact, opportunities are plentiful for those interested in investing in senior housing communities, especially in markets in California, Florida, Texas, and the Pacific Northwest (including Montana, Idaho, and the Dakotas.) 
Sherman & Roylance’s Shaylee Green recently spoke about the benefits and value of investing in senior living properties in a podcast hosted by The Commercial Connection. As we settle into 2023, there’s no better time to look at some of the top reasons now is the time to invest in senior housing. We often say “it’s not what you know, it’s who you know”, and that certainly applies to recession-resilient investment opportunities. 
We understand it can be difficult to know where to start when it comes to investing in senior housing, but a good place to start is working with seasoned experts like our team. With more than 75 million Baby Boomers in the United States alone, demand for skilled nursing, lifestyle facilities, and other senior housing communities will only grow. 
Here now is a look at our top reasons to invest in senior housing this year:

  •  High Rate of Return 

Cap rates are currently sitting at 7-12% for senior housing, which is higher than other product types. For example, large apartment portfolios in 2020-2021 traded at 4-5% cap rates. 

  • Opportunities for Long-Term SBA  Loan Assumption

This is government-backed funding boasting 2.2-4% Interest rates. 

  • Potential for  ‘Mailbox Money’ 

Opportunity for remote ownership once you buy the property and tap a strong operation company to lease back. 

  • Potential Higher Return on Smaller Facilities

There is something to be said about investing in something that allows you to give families peace of mind that their loved ones are being cared for in a loving, respectful, and professional environment.  

  • High Demand with Ageing Baby Boomers  

As mentioned above, Boomers are a significant percentage of the U.S. population and are approaching the age where they are looking to sell their home and move into a senior housing community. 

  •  There Will Always Be a Need for Senior Housing 

As we are seeing with the influx of Baby Boomers now, there will always be a need for senior housing. 

  •  Development Opportunities 

A lot of cities need developers to step up and build right now. This means there will always be a need for senior housing developments in a lot of large, medium, and tertiary markets. Unique co-op structures etc. Green building practices are also growing in popularity, which is another big area of opportunity for investors. 

  •  High Demand Will Continue 

People like to stay close to home to visit family, which adds demand in all markets. Furthermore, interest in alternatives to traditional nursing homes is high so communities and investors may be well-positioned to get into a growing market on the ground floor. 

  • Less Competition

Although senior housing building slowed down over the last several years, there are excellent opportunities for patient investors due to less competition. 
Looking to invest in senior housing facilities, or do you have questions about our current inventory? Reach out to one of our team members today, and remember to catch us at the NIC’s Spring Conference March 1-3 in San Diego. Also catch our founders, Shep Roylance and John Sherman, at Interface this Thursday.