What We’re Talking About: How to Invest in Senior Housing

As the senior population in the United States continues to grow, investors are increasingly interested in senior housing as a potentially lucrative investment opportunity. With advancements in healthcare and technology leading to longer life expectancies, there is a higher demand than ever to invest in senior housing, and this is a trend our experts expect will continue into the future. 
Investors looking to enter the senior housing market need to understand the different levels of care that are provided in senior housing facilities, as well as the property types. Senior housing is a highly regulated industry that is facing numerous challenges and changes - from a possible staffing mandate to ongoing labor to new regulations impacting SNF operators. If you recall earlier this year we discussed the top reasons to invest in senior housing, and the purpose of today’s blog is to go over not why, but how.

Top Considerations Before You Invest in Senior Living 

Investing in senior housing can be a profitable decision, especially with the right research and partners. There’s no question the senior housing industry is on the rise as Baby Boomers are seeking out communal living spaces that meet their needs and offer the care and services they need. The senior housing market is diverse, offering a range of options from independent living communities to assisted living facilities and nursing homes. 

So, the first step is to ask yourself what type of facility best fits your needs:

  • Independent Living
  • Continuing Care Retirement Communities
  • Skilled Nursing Facility
  • Memory Care 
  • Assisted Living 
Each carries its own set of requirements and pros and cons, so be sure and do your research before moving forward. As always, the Sherman & Roylance team is happy to meet with you to discuss your options and go over our current inventory
Once you’ve asked yourself what type of facility best fits your needs, it’s important to understand that operators play an essential role in the success of senior housing investment. Again, because senior living is a highly regulated industry, operators need specific experience and knowledge to manage properties successfully. 

What Are My Options?

The top senior housing investment options include:  
  • Real Estate Investment Trust (REITs) 
      • The lowest-risk option available, REITs are companies that own and operate incoming-producing real estate, such as in senior living. 
  • Renting a commercial property to an outside operator
      • This is a great option that allows investors to reduce risk by bringing in a third-party operator to run and manage the facility. 
  • Independently own and operate a facility 
    • While this is the most lucrative option, it also requires experience, knowledge, and a deep understanding of the industry’s regulations. 
  • 55+ Communities 
    • There are huge investment opportunities in 55+ independent living communities, especially these days. Because this option is most similar to a traditional real estate investment, it’s a great option for first-time investors.

There’s no doubt investing in senior housing is a viable option, but it absolutely requires research, knowledge, and careful consideration of the options out there. By taking the time to fully understand the vast senior care spectrum, the way these facilities are managed, and the demographics of your chosen area, investors can make informed decisions about where, how, and when to invest in senior housing. Questions? Contact the Sherman & Roylance team today.