Assisted living is a hot emerging trend in real estate investing, and firms like Nelson Partners are betting big on these types of care facilities. But is it a wise investment for the average investor? Let’s look at some reasons why assisted living might be the right addition to your portfolio:
1) Aging Population
The population of the United States is aging, and this trend is only going to continue. By 2030, it’s estimated that one in five Americans will be over the age of 65. This means that there will be an increasing demand for assisted living facilities.
2) Low Maintenance
Assisted living facilities are relatively low maintenance investments. While they do require some everyday upkeep, they don’t have quite the upkeep costs of a nursing home.
3) Steady Stream of Renters
Many assisted living facilities have a steady stream of renters due to the fact that most people will rent for a few months before needing a full-time care facility. This is why buying into an assisted living facility can be a great way to ensure a consistent stream of income.
4) Growing Industry
The assisted living industry is growing rapidly and is expected to reach $257 billion by 2020. This means that there is plenty of potential for growth in this industry.
5) Tax Benefits
Assisted living facilities offer some great tax benefits. For example, if you’re looking to write off a medical expense, assisted living facilities can be counted as such.
6) Easy Access to Capital
Assisted living facilities are easy to finance and typically allow for relatively easy access to capital. If you already have relationships with lenders or are looking into private financing, you’ll find that most banks are eager to loan money to these types of properties.
7) Low Fees
The fees on assisted living facilities are relatively low. Again, this is because you aren’t investing in new construction or a renovation project, which usually have higher fees associated with them.
8) Professional Management
One of the great things about investing in an assisted living facility is taking advantage of professional management. This means that you don’t have to worry about hiring and managing staff, marketing the property, or dealing with any other day-to-day tasks.
9) Resale Value
One of the great things about assisted living facilities is that they have a high resale value. This is because there is always a demand for these types of properties, and they tend to hold their value well over time.
10) Safe Investment
Assisted living facilities are considered to be safe investments. They typically don’t experience a lot of fluctuation in value, and they are relatively low risk.
11) Consistent Cash Flow
Assisted living facilities offer a consistent cash flow, making them great for investors who are looking for a steady stream of income. In fact, there is usually a waiting list in many areas when it comes to assisted living facilities. This means that once you have one built and ready to go, you’re going to have plenty of interested buyers.
12) High Occupancy Rate
Not only do assisted living facilities enjoy a steady stream of renters, but they also have a very high occupancy rate as well. This means that you won’t experience many vacancies or turnover costs with this type of property.