Why is Investing in Senior Housing a Great Financial Savvy DecisionMay 23, 2023
As life expectancy increases and the elderly population grows, the demand for senior housing in the future is expected to be significant. This has led many investors to consider adding senior housing to their multifamily portfolios. However, before investing in senior housing, it's crucial to understand what to expect.
This article covers what the demand for senior housing will look like in the future, the different types of senior housing, potential challenges that may arise, and some investment strategies to consider. Savvy investors who can pinpoint ideal markets and seek properties with potential long-term growth may find investing in senior housing a good idea. With demand for senior housing on the rise, both individual and institutional investors are expressing interest, and fortunately, senior housing offers potential benefits.
The potential benefits of a senior housing investment include:
Growth opportunity: As the elderly population is projected to grow exponentially in the coming decades, demand for senior housing will rise, providing opportunities for investors, especially since supply is struggling to keep up with increasing demand.
Resistant to recessions: During the Great Recession, the senior housing market was the only commercial real estate asset class that saw positive rent growth. This market's high resilience is due to high demand and low supply. However, it's important to note that while senior housing is recession-resistant, it's not completely protected from the effects of a recession.
Needs-based: A great benefit of investing in assisted living facilities and senior housing is that it's a needs-based market. Aging adults rely on the services and amenities provided by senior housing, and other markets and property assets are unable to meet these demands. Investors can play a critical role in helping developers construct new facilities to meet the needs of this growing population.
In conclusion, investing in senior housing may be a viable investment opportunity for those who understand what to expect and can identify ideal markets and properties with long-term growth potential. As the demand for senior housing is projected to rise, it's essential to consider the potential benefits and challenges of this investment and develop a sound investment strategy.
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