As people have begun moving into senior living facilities at a younger age, facilities across the globe have had to adjust to this new demographic of residents. The change has been from predominantly healthcare support facilities, to facilities that blend a mix of hospitality, lifestyle, and healthcare support. It is important for senior housing property owners and operators to stay on top of these industry changes to maintain successful operations. Below we take a deep dive into everything you need to know about managing senior housing properties.
Senior Housing Property Management Defintion
Senior housing property management is a specialized type of real estate management that deals with the comprehensive oversight of senior living properties such as 55+ communities and skilled nursing facilities.
Senior Housing Property Management Services
Although there are many different types of senior living facilities, the primary goal of a senior living property is to ensure that its residents’ healthcare needs are met in addition to an enjoyable lifestyle environment. Since these facilities either provide or coordinate medical healthcare professional services, there is significant licensing and compliance required. Below we take a look at some of the most common senior housing property management services:
- Resident Customer Service for Residents and Families
- Medical Service Support and Assistance
- Facility Marketing and Advertising to Attract Prospective Residents
- Licensing and Compliance
- Revenue Management and Budgeting
- Accounting (Accounts Payable, Accounts Receivable)
- Staff Development and Human Resources
- Safety and Risk Management
- Facility Maintenance and Property Upkeep
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Senior Housing Property Management Types
If you’re an owner or investor in a senior living facility, choosing the best type of property management structure is vital to ensure that your residents receive the best possible care. There are three common management structures for senior living facilities: on-site management, third-party management, and a hybrid model. Each has its own benefits and drawbacks, so choosing the one that’s right for your facility is crucial. We take a look at each below.
On-Site Senior Housing Management
On-site management is the most common type of management structure for senior living facilities. In this model, the property owner or manager is also responsible for the facility’s day-to-day operations. This can be a good option for smaller facilities or for those that are just starting out.
The main advantage of on-site management is that it gives the property owner or manager complete control over the facility. They can ensure that the facility is run the way they want it to and that the residents get the best possible care. The downside of on-site management is that it can be a lot of work. The property owner or manager is responsible for everything from hiring and training staff to dealing with complaints and concerns. If the facility is large or complex, it can be challenging to keep up with everything.
Third-Party Senior Housing Management
Third-party management is a popular option for larger senior living facilities. In this model, a third-party company is hired to handle the facility’s day-to-day operations. The property owner or manager is still responsible for the overall direction of the facility, but they don’t have to worry about the day-to-day details.
The advantage of third-party management is that it can take a lot of the work off of the property owner or manager. They can focus on the big picture and leave the details to the professionals. The downside of third-party management is that it can be expensive. The third-party company will charge a fee for their services, and the property owner or manager will also have to pay the salaries of the staff they hire.
Hybrid Senior Housing Management
The hybrid model is a combination of on-site management and third-party management. In this model, the property owner or manager is responsible for some of the facility’s day-to-day operations, but a third-party company is hired to handle the rest.
The advantage of the hybrid model is that it can give the property owner or manager the best of both worlds. They can control the facility completely, but they don’t have to worry about the details. The downside of the hybrid model is that it can be more expensive than on-site management or third-party management. The property owner or manager will have to pay the salaries of the management staff that they hire, and they’ll also have to pay the fee for the third-party company.
Senior Housing Property Management Fees
The monthly management fee for a senior housing facility can range between 5% and 10% of gross revenue; much of this will depend on the healthcare services offered, amenities, and property size. Contracts to manage senior housing properties are usually solely based on a percentage of rent or “cost plus”, which is comprised of a base management fee and performance incentive fee. The incentive fees are compensated in proportion to positive financial performance of the property – including increased revenues and decreased costs. Regardless if you choose to self manage or hire a property management company, finding the balance between positive investor profits and delivering exceptional care/service to residents, is an extremely important equilibrium to find for senior housing property investment properties.
Senior Housing Management Software
Senior housing management software helps coordinate the many ever-changing components of running a senior housing facility. From generating an occupancy report for investors, to coordinating resident services, senior housing management software ensures smooth operations for everyone.