Senior Living Real Estate Investment


Senior Housing: Levels Of Care

EXPO REAL: Senior Housing & Healthcare Investment

The term senior housing is a broad classification for housing communities that cater to long-term residents over the age 65. Skilled nursing facilities, which although occasionally will get grouped with senior housing, are actually defined as senior care. Before you invest in one of these types of facilities, you should understand their specialties and how they differ from one another.

Risks Of Investing In Senior Living Reits

Stocks with lots of growth potential arent without risks, and senior living REITs are no exception. Before you consider any of these stocks for your portfolio, there are a few risk factors to be aware of.

First, rising interest rates are a downward catalyst for REIT share prices. In a rising-rate environment, REIT yields rise, and price has an inverse relationship with yield. Weve been in a low-rate environment for years, but if this changes, it could put pressure on REITs.

Oversupply is another risk that has come into play in recent years. Whenever theres a great deal of growth expected in a market, theres a possibility that new supply could hit the market faster than demand can keep up. In the case of senior living REITs, this could lead to increased vacancies and loss of pricing power.

Finally, there are a bunch of company-specific risks that could be present.

For example, many senior living facilities arent leased to tenants. Instead, they’re operated as partnerships with their operators. That means income fluctuates depending on how well the businesses are doing. And some senior living REITs have lots of leverage, while others have strong balance sheets. These and other risk factors make it important to know a fair amount about each company before you invest.

Consult With A Tax And Legal Advisor

There are many tax and legal issues to consider when investing in or starting a residential assisted living facility. Investors that earn certain amounts of self-employment, LLC, or REIT and investment income may be required to pay estimated taxes quarterly or face underpayment penalties.

Because protecting your real estate assets and investments can involve many different aspects ranging from state and local laws to federal healthcare regulations, tax strategies, and business entity organizational concerns, it is always a good idea to consult with a tax advisor.

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Senior Housing A Growing Investment Opportunity

As the baby boomer generation ages, demand for senior housing and retirement homes is expected to soar. For commercial investors, this is also a rapidly growing asset class which is comprised of four main categories of facilities: independent living, assisted living, memory care and skilled nursing. Each of these have highly nuanced sub-sets based on age and mobility, available budget and many other factors.

As international real estate brokers, alphaSet is highly experienced in this field. The nuanced nature of this asset class means investors need to rely on highly experienced operators who can connect highly qualified investors to an inventory of well-researched senior housing facilities with attractive return rates. This expertise means we can also quickly connect sellers with suitable investors.

Deep Rooted Experience Future Driven Approach

Senior Housing Real Estate

Harbourdale Capital is a single family office with diverse investment interests in residential, commercial and senior living real estate, private equity and venture capital. See our portfolio here.

We are principally focused on the strategic investment and development of innovative, purpose-built senior living care communities in the UK and abroad. This includes care homes, care villages, and more visionary forms of later living accommodation. This focus leverages our extensive operational experience combined with our forward-thinking approach to development and real estate.

Founded in 2021, Harbourdale builds on our 30-year successful track record of developing and operating the award-winning Tanglewood Care Home Group, as well as other real estate developments.

Firm believers in collaboration, we are divergent thinkers with a vision of a more purposeful, inclusive society for people of age.

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Why Partner With 1031 Crowdfunding

At 1031 Crowdfunding, we make acquiring real estate that adheres to 1031 exchange criteria more accessible and convenient. Investors work with us because they get personalized support through every step of the exchange process. Our expert team has over 60 years of combined experience in securities, and we offer comprehensive assistance for every client.

From our innovative online DST marketplace to guidance for filing paperwork efficiently and accurately, we make real estate exchanges fast and straightforward. While the law stipulates that investors must close on a replacement property in 180 days, many of our clients close on their 1031 exchange properties in just 3-5 days.

Call us today at 533.1031 to learn more about these asset types and how they may fit into your real estate portfolio, or Join the Crowd today to start your investment process.

People Are Living Longer

In the U.S., the average life expectancy is 78.8 years, due to improvements in health care and medicine. Antibiotics, vaccines and medications that manage long-term conditions help people live longer and healthier lives. Improvements in drinking water safety and quality and reducing malnutrition with healthy eating have also contributed to people’s extended life expectancy.

As a result, the number of seniors is rising, and the demand for designated housing arrangements with amenities that serve this population is growing. By 2034, the number of people over age 65 will outnumber the number of children under age 18 for the first time.

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Benefits Of Investing In Senior Living

If you are considering investing in a retirement home or other senior housing, there are many benefits.

– It’s needs-based: Often, when investing in real estate, the goal is to earn income from tenants. Senior housing is often needs-based, meaning the people who live there rely on the services and amenities it provides. Senior housing and care is the only commercial real estate asset class that experienced positive asking rent growth during the Great Recession. Rent growth has been steadier, less volatile and has generally exceeded that of other commercial real estate property types.

– It’s relatively recession-resistant: Some investments rise and fall in value based on the overall economy. For example, the COVID-19 pandemic adversely affected the luxury rental market, but led to an uptick in demand for residential home sales. Older adults will always need housing, making investing in assisted living facilities and other types of senior housing relatively stable. Senior housing shows high rates of annual returns at the three-year, five-year and 10-year points. Even amid the Great Recession between 2007 and 2009, the demand for senior housing remained high.

– It has growth potential: The number of older adults in the population is increasing each year. Changes associated with aging, such as a loss of mobility or the development of chronic illnesses, can mean that more and more people are likely to look into moving to senior housing at some point in their lives.

What Is An Assisted Living Facility

Robert Kiyosaki Says Residential Assisted Living Is The Number One Real Estate Investment Today!

An assisted living facility provides live-in care for those who require ongoing or extenuating physical or medical attention or rehabilitation therapy. While most assisted living facilities focus on serving seniors, care can be provided to anyone in need, including those who may have mental or physical disabilities. Care can include helping residents use the bathroom, get dressed, bathe, take medication, and provide meals.

Assisted living facilities are privately owned and operated, although many partner with local hospitals or medical schools to help with ongoing training of students and staff. Since this is a privately-operated sector of senior housing, quality of care, living units, cost, and amenities will vary. With that being said, each assisted senior-living facility provides 24-hour on-site care by a staff of licensed skilled nurses and medical professionals.

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Brings Positive Outlook For Senior Living Real Estate Investments

Dana WollschlagerPlante Moran Living Forward

In a recent national survey, senior housing is considered the best prospect for investment and development.

Out of all residential property types, senior housing is the best prospect for investment and development in 2018 according to research from the Urban Land Institute . The senior living and care industry continues to draw the attention of both institutional and private investors.

Rent To A Private Operator Or Third

The most common way an active investor invests in an assisted living facility is by purchasing an existing facility or by converting a commercial property into an ALF and renting the property to a third-party management company or private operator who runs the facility. With this method of investing, the property owner earns passive income in the form of rent while reducing their exposure to the risk and liability associated with operating and managing an ALF.

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Invest In A Real Estate Investment Trust

A REIT is a company that lets investors pool money to purchase property. REITs can take many forms. Some buy properties to rent to tenants, while others actively develop land and manage properties. As an investor in a REIT, you wouldn’t be solely responsible for managing the property.

A REIT can be a good option for an investor who’s looking to passively get involved with real estate or for an investor who doesn’t have a high net worth. Another way to understand REITs is to think of them like mutual funds for real estate.

Plan For Assisted Living Facility Taxes

JCH was asked by National Real Estate Investment Magazine ...

Protecting any investment requires utilizing the best methods to reap the most earnings possible. Part of this involves effective management of investments and capital gains taxes. The recent Tax Cuts and Jobs Act as part of Trumps tax reform plan has provisions which primarily benefit real estate investing for the next few years. The act allows for a 20% deduction on qualified business income from pass-through business entities such as limited liability companies , S corps, and real estate investment trusts . Because the tax reform also allows for some assets like real estate property to be considered in calculating the deduction, many real estate investors can utilize this tax break. However, there are limitations regarding healthcare businesses and those with certain income levels. To see if you qualify for this deduction with your investments it would be best to consult with a tax advisor.

Other components of the Tax Cuts and Jobs Act reduce available deductions for mortgage interest but keep the deduction for those with second homes. Again, this benefits real estate investors who may want to invest in an ALF. Another provision of the reform makes home equity loan deductions apply only to qualified home improvements. The necessary improvements to convert a home into an assisted senior living facility may be qualified for this deduction, offering possible tax advantages.

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Storm Gives Way To Green Shoots

Mitra and other Welltower execs are not only optimistic about rate growth but are hopeful that the labor crunch is easing, as enhanced unemployment benefits have been phased out, the latest Covid-19 surge is dissipating, and in-person school has resumed.

Although I expect we will still see some continued pressure for several months, Im hearing green shoots as our operators are making comments such as, the peak labor challenge has passed, or weve seen a substantial pickup in applications, or new hires outnumber the employees leaving 2.5 to one, and even were currently fully staffed at almost all of our communities, Burkart said.

Demand also remains unprecedented, judging by October and early November sales trends.

We have never seen this kind of momentum, thats all Im willing to say, Mitra commented.

Mitra and Burkart are planning to build on these tailwinds by pursuing operational innovations. Burkart joined Welltower as COO in June 2021, coming from multifamily REIT Essex Property Trust .

While the focus on care has been and continues to be very high, I believe that similar to the multifamily industry 20 to 30 years ago, there an opportunity to modernize our seniors housing business and improve the effectiveness and efficiency of the operations, he said.

Though tight-lipped about his plans, he identified targeted community renovations, digital transformation and revenue management as areas of focus.

Are You Looking To Invest Into Senior Housing And Assisted Living Opportunities In The United States Visit Our Sister Company

For the senior care investor the Senior Housing and assisted living space benefits from a massive demographic groundswell. As the Baby Boomers begin their retirement years, the generation will reach the 75+ age range in the year 2021. As this occurs, they will be moving into existing building stocks that are currently under-supplied and increasingly out of step with evolving consumer demands and care giving frameworks. For instance, according to CBRE, 40,325 new units must be delivered per year to meet peak demand . This can be compared to the current construction rate of 16,440 units per year as of 2014. Despite the overwhelming growth in the senior population, new supply growth has remained well below the highs of 2006 and early 2008, while stabilized occupancy has continued to increase.

Life expectancies have risen sharply, from a global average of 49 years in 1955 to 72 years today. By 2040, the global population of those aged 65-and-older will reach 1.3 billion, double what it is today.

Senior housing and assisted living real estate is one of five major investment opportunities created by aging populations, with demand for new senior housing units in the United States set to surge through 2035. In fact, the U.S. senior housing industry is poised for unprecedented growth.


High Demand

Low Supply


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Why Senior Housing Is Real Estates Most Recession Proof Asset Class


The rate at which American Seniors are retiring is truly staggering. The number of Americans 65 and older will increase from 56 million in 2020 to 79.2 million by 2035, due to the emergence of Baby Boomers into the age of retirement. Such a vast increase only creates a greater demand for Senior Living Facilities.


As the elderly population grows, the rate of senior housing new construction is not keeping pace. Units under construction began a significant decline in 2008 and continued to fall through 2011 with only modest growth through 2014. When these two dynamics are married, the need that is left unaddressed is the growing market for newer and better facilities/communities tailored to emerging retirees.

Location Selection: On every project sponsored by Senior Living Fund an independent 3rd party consultant is brought in to look at the local supply and demand and conduct absorption studies to insure facilities only get built in the highest demand micro markets.

Developers: A detailed inquiry into each development team looks at the experience and track record of the developer. Our typical developer always has a seasoned team often with decades of experience in construction, development and management experience in the assisted living field.

Are Senior Housing Assisted Living Properties And Senior Care Businesses A Great Investment In 2022

Real Estate Investing in Senior Living Areas with Phillip Vincent
  • In 2022, there are an estimated 25 million Americans over the age of 75 and 9.3 million over 85, a common move-in age of a resident to seniors housing.
  • Its not until 2031 that the oldest baby boomer will have turned 85effectively opening the proverbial floodgates for senior housing investments.
  • 2 million Americans will live in senior care communities by 2030, doubling from 2016.
  • By 2050, it is estimated that over a fifth of the population in the United States will be 65 years or older, compared to only 15.6 percent today.

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Residential Assisted Living Facilities

There are over 30,000 assisted living communities in the U.S., of which 48% are smaller facilities with only four to ten beds. Just under half of those were operated by independent businesses. These facilities offer less than a traditional nursing home and provide more independence to elderly tenants. They typically require minimal staff to prepare daily meals and provide limited nursing time to each tenant. Some offer transportation services as well.

This industry is expected to grow for many reasons and has attracted the attention of investors. There are many ways to invest in residential adult and elderly care facilities. The type of investment and the method of structuring the investment can greatly impact the returns you see. Limiting liability and preserving anonymity are two methods of reducing the impact of possible issues with ALFs.

Investors can limit the tax liabilities of running an elderly care center by implementing a variety of legal strategies. There are also many tax breaks available from the recent tax reform, but some are set to expire in a few years. To ensure you meet required laws and regulations, to protect your assets and investments, and to make the most of your tax liability, reach out to Anderson Advisors today.

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Factors Driving Senior Living Investment And Development

Many factors are fueling these trends. ULI explains the growing momentum for senior housing as a spectrum of opportunity for the real estate industry as the tremendous intergenerational diversity of the baby boomers affects the need for housing and services across the country.

The ULI reports sites National Investment Center for Seniors Housing & Care to explain the factors fueling investment and development, including:

  • A growing demographic driving demand
  • Compelling returns
  • Increased transaction volume and liquidity
  • Improved transparency and availability of data
  • Partnership opportunities with post-acute health care providers
  • Better understanding of the benefits of senior living as a housing option

Are you considering a senior living development or investment? If you are, its important to think through your strategy. Plante Moran can help. Our two real estate groups offer services related to senior living development and real estate investment.

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