Hot Real Estate Market Alert: Senior Housing Investments

By
Mortgage and Lending with Olympus Labs

There are dozens of options when it comes to real estate investing, and senior housing is a current recommendation. It’s a growing market with considerable demand for quality senior housing for those living on a budget or otherwise. You could make your fortune in 2019 and beyond with such and investment.

The PwC’s Emerging Trends in Real Estate 2019 Report revealed that savvy investors are diving deep into senior housing, looking into independent living units, assisted living, nursing homes, and long-term care facilities. The report indicated a strong market with promising opportunities.

Additionally, nearly 20 percent of respondents to the CBRE U.S. Seniors Housing & Care Investor Survey and Trends Report said that they were already investing in senior housing and another 20 percent said they would like to be.

It’s only a matter of time before the senior housing investment sector becomes oversaturated, so now is the time to tap into the market. Here’s why you should invest now:

Guaranteed Rental Income

“If you decide to buy and rent out properties in a senior cohousing community, you’re guaranteed stable rental income,” Daniela Andreevska, content marketing director for Mashvisor told U.S. News.

Senior housing is a much more stable rental platform than many other rental properties. Seniors are typically living on a fixed income, and often payments are made directly from their bank accounts to yours. Insurance companies and government programs often cover the costs as well, helping to guarantee that you’ll receive the rent.

According to Seniorly.com, a resource that helps seniors find appropriate housing arrangements, the average cost of assisted living in the U.S. is $3,750, but luxury facilities can charge upwards of $10,000. Many of these luxury accommodations have many extra amenities that aren’t always used, increasing your profit potential.

Besides that, seniors are much less likely to damage or vandalize your units, reducing your risk of losing money on the investment.

Baby Boomers Raise the Demand

Baby boomers are retiring and requiring assisted living arrangements. By 2035, there will be approximately 78 million Americans over the age of 65, a massive demographic that you can serve with the investment you’ve made.

“The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history,” says Jonathan Vespa, a demographer with the U.S. Census Bureau.

To put this into perspective, there are currently 8 million Americans over the age of 65. That means in just 15 years, the number of baby boomers will grow by 1,000 percent.

“There are two distinct segments within this large age group. The younger boomer, born between the late 1950’s and the early 1960’s, is called Generation B or Gen B,” says Seniorly CEO and founder Arthur Bretschneider. “This is the demographic perfectly aligned with any discussion on senior housing for boomers.”

They’ll need housing, and you can provide such if you know what they’re looking for.

According to a recent article in SFGate, when it comes to housing, Gen B refuses, “...to be seen as ‘old’ as they start new careers, companies and relationships in this next chapter of their very active lives. They want to live in a place that they love, but that has all the services that are personalized for them.”

Smaller Playing Field Right Now

“Right now is an incredible time for investors to look at senior cohousing as an investment option,” Kevin Vandenbos, a Michigan broker also told U.S. News, “The demand is quickly increasing and it’s not yet a mainstream investment, like typical single family and multifamily rentals.”

There’s great incentive to enter the senior housing market right now. Because the number of Americans over the age of 65 is still at a normal rate right now, many people haven’t thought about investing in senior housing for the future. There’s still ample opportunity to be among the first to enter this market and make a huge profit when the boom of retirees happens.

Recession Proof Investment

Although no investment is fully recession proof, senior housing is close. The demand in this sector isn’t affected as much by the rise and fall of the economy, which is largely regulated by employment rates. Retirees typically aren’t receiving their income from a paycheck, so the risks of them being unable to pay are slim.

Furthermore, the demand for medical and assistive care for our nation’s seniors will never disappear. Aging individuals will always need long-term medical care and facilities to serve them. There’s no fear of the recession pulling your investment out from under you.

Overall, savvy real estate investors should be capitalizing on the senior housing sector as soon as possible. Consider it an investment towards your own retirement.

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David Jackson, MBA

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