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The Ultimate Senior Housing Real Estate Resource

Home » The Ultimate Senior Housing Real Estate Resource

As the human lifespan continues to get longer, elderly care needs continue to grow more demanding. While seniors can mostly live autonomously, they eventually start to require occasional supervision or medical assistance. While priced at a premium over regular apartment housing, senior housing mimics a multifamily apartment living but includes amenities such as linen services, medication management,  housekeeping, and entertainment recreation. Below we take a deep dive into everything you need to know about senior living properties.



Senior Housing Definition

Senior housing (also called retirement homes) refers to multi-residence housing facilities that are intended for the elderly.

Senior Housing Definition

Senior Housing Explained

​​Senior housing refers to a class of rental properties that is designed to meet the needs of older adults who may require assistance with their regular daily activities, such as bathing, dressing, eating, and social leisure. They’re also places for older folks to build community and make the most out of their golden years. The number of senior housing facilities has grown significantly in recent years as the baby boomer population ages, leading to significant, sustained demand for senior housing properties from both residents and investors.

There are several different types of senior housing, which all vary by the services offered and can include independent living, assisted living, memory care facilities, continuing care retirement communities (CCRCs), and skilled nursing facilities/nursing homes. Senior housing properties offer investors stable cash flow alongside appreciation benefits, supported by one of America’s most rapidly-growing industries.


History of Senior Housing

History of elderly housing - “The “Friends’ Almshouse of Philadelphia
Image: https://libwww.freelibrary.org/digital/item/44701

Much of the beginning of elderly care facilities, finds its origins in religious organizations that established “almshouses”, which were charitable institutions for the impoverished and elderly. This concept was brought over by the Europeans who colonized North America in the 1600s. Although it is open for debate, the first documented facility of this type that was specifically targeted for the elderly is believed to be “The “Friends’ Almshouse of Philadelphia” which opened its doors in the early 1700s. 

The almshouse model worked up until the early 1900’s where the Great Depression of the 1930’s adversely affected many elderly people. The United States government stepped in and enacted the Social Security Act in 1935, which included the payments to the elderly and impoverished. Whereas almshouses were free of charge, this new government intervention ignited the spike in privatized institutions which charged a fee and brought about the privatized for-profit business model that is common today. Since that transitioning time, the number of private facilities in the United States has grown significantly, as has government regulation and oversight.


How Do Senior Housing Facilities Work?

Senior housing can take many forms, from independent living 55+ communities to assisted living and skilled nursing care. Most senior housing facilities also offer a variety of social and recreational activities to help residents stay active and engaged. Many also offer full or part-time medical care to help seniors stay healthy in their golden years.

Housing

Recreation

Medical Care

Community


Types of Senior Housing

There are several types of senior housing, each with its own unique set of benefits and drawbacks. We take a look at each type below.

Independent Living

55+ Communities

Assisted Living

Memory Care

Continuing Care

Skilled Nursing

Independent Living

Independent Living Senior Housing

Independent living is a type of senior housing designed for seniors who are able to live independently, but who may want or need some extra assistance with day-to-day tasks. Independent living communities typically offer a variety of amenities and services, such as transportation, housekeeping, and meals, which can make life easier for seniors.

55+ Communities

55+ Senior Communities
Image: https://www.noblespondlifestyle.com/

55+ communities (also called retirement communities or lifestyle communities) are a popular independent living option for seniors. These are housing developments that are specifically designed for seniors aged 55 and over. These communities typically include amenities like swimming pools, golf courses, and clubhouses. They may also have features like on-site medical care and social activities.


Assisted Living

Assisted Living Facilities

Assisted living is a senior housing type designed for seniors who need a little more help with daily living activities, like bathing, dressing, eating, and other daily tasks. Assisted living communities typically offer a variety of amenities and services, such as 24-hour staff, transportation, and meals, and often some level of medical care, which is typically not as extensive as more specialized, healthcare-oriented senior living options.

Memory Care Facilities

Memory Care Facilities
Image: https://lanternlifestyle.com/chagrinvalley/

A memory care facility is a long-term care facility that specializes in caring for people with dementia, Alzheimer’s disease, and other types of memory impairments. Memory care facilities help provide a safe and supportive environment for people with memory impairments, and they offer a range of services and amenities to help residents maintain their independence and quality of life. New innovative facilities are designing their interiors to mimic familiar environments as part of their residents’ treatment.

Continuing Care Retirement Communities (CCRCs)

Continuing Care Retirement Communities (CCRCs)
Image: https://www.thehillatwhitemarsh.org/

Continuing care retirement communities (also called CCRCs) are a senior housing type that offers a continuum of care, meaning that they provide a variety of housing options and levels of care, all in one community. CCRCs typically offer independent living, assisted living, and skilled nursing care, as well as a variety of amenities and services. CCRCs typically have higher monthly fees than other types of senior housing, but they can offer a better sense of security and peace of mind for seniors and their families.

Skilled Nursing Facilities (Nursing Homes)

Skilled Nursing Facilities (Nursing Homes)

A skilled nursing facility (commonly called SNF) is a type of nursing home certified to provide skilled nursing care and rehabilitation services. SNFs are also known as nursing facilities, skilled nursing units, and skilled nursing centers. The most important difference between a SNF and other types of nursing homes is the level and duration of care each provides. SNFs are better equipped and staffed to provide care for residents who need more medical attention and rehabilitation services than what is typically available in an assisted living facility or independent living community. The care provided in a SNF generally is more expensive than other types of nursing homes, but it is important to remember that the level of care is also much higher.

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Pros and Cons of Investing in Senior Housing Properties

As the baby boomer generation continues to age, we’re seeing a growing demand for senior housing. While there are several benefits to investing in senior housing, there are also some potential drawbacks that investors should be aware of.

Senior Housing Investing Pros

  1. Growing Demand – The population of Americans aged 65 and older is projected to nearly double by 2050. This increase in the senior population will create a greater demand for senior housing, resulting in higher rents and occupancy rates.
  2. High-income Tenants – In many cases, seniors tend to be more financially stable than younger tenants, making them significantly less likely to default on their rent. This makes senior housing a more attractive real estate investment for landlords and investors.
  3. High-income Tenants – In many cases, seniors tend to be more financially stable than younger tenants, making them significantly less likely to default on their rent. This makes senior housing a more attractive real estate investment for landlords and investors.
  4. Low vacancy Rates – Senior housing typically has lower vacancy rates than the overall rental market, making it a more stable investment and reducing investor/owner management costs.
  5. Government Incentives – Government incentives are often available for investors who develop or renovate senior housing, such as tax breaks or low-interest loans.

Senior Housing Investing Cons

  1. High Initial Investment – Senior housing can be expensive to develop or renovate, especially if it needs to meet certain accessibility standards. 
  2. Increased Regulation – Senior housing is subject to stricter regulation than other types of rental property, which can add to the cost of development and operation. 
  3. Limited Appeal – While the demand for senior housing is growing, it is still a niche market that may not appeal to all renters. This can make it difficult to fill vacancies and could result in lower rents. Long-term Commitment – Senior housing is a long-term investment that may not be suitable for investors looking for a quick return. It can take several years to see a return on your investment, and there is always the risk that the needs of seniors may change over time.

Senior Housing Property Management

Senior Housing Property Management

As a type of rental property that is in charge of taking care of the less capable, senior housing management is something that rental property investors should pay close attention to. From varying degrees of licensing and healthcare services, the way how to manage a senior housing property will depend on many different aspects including its size and scope of services and amenities offered to residents.


How to invest in Senior Housing Properties

As the United States senior population continues to grow, so does the demand for senior housing. While there are many ways to invest in senior housing, some are better than others. Here are four of the best ways to invest in senior housing properties:

Buy an Existing Property

One of the best ways to invest in senior housing is to buy an existing property. Not only will you have a ready-made asset, but you can also take advantage of any existing goodwill and reputation the property may have.

Develop a New Property

If you have the land and the resources, developing a new senior housing property from scratch can be a great investment. You’ll be able to tailor the property to your own specifications and create a brand new asset that will require minimal property maintenance for its initial years.

Invest in a Senior Housing Portfolio

Investing in a portfolio of senior housing properties can greatly diversify your investment portfolio and reduce your risk. You’ll be able to get exposure to a variety of different properties and markets, which can help to mitigate any losses you may experience in any one particular property. 

Invest in a Senior Housing REIT or Crowdfunding Deal

A REIT, aka a real estate investment trust, is a company that owns and operates income-producing real estate. Senior housing REITs are a great way to get exposure to the senior housing market without having to directly own or operate any properties. You can also purchase fractional shares in senior housing properties via a real estate crowdfunding deal.


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