Asset with Less Dependency

Courtesy of Harry Dent Jr, The Demographic Cliff

Have you ever heard of an asset class or type that offers little to no dependency on fluctuating market conditions within real estate or economic conditions?

I bet I caught your attention now. 

This niche, Senior Housing, is considered to be a "Core Real Estate Asset Class" because there are so many different variations and creations that can be executed and still generate lucrative returns. 

Have you even been in a situation where you are constantly paying attention to which way real estate is going, heading, plummeting?  Are you constantly thinking of when the next "crash" will and how it will affect your investments?

Some investors were wiped out during the mortgage crisis of '07, '08. Why?  

This was something that I never fully understood, because if you are investing, you are investing for the cashflow - passive income that is being generated from the investment. 

If you were solely "investing" for the appreciation, then yes, you could come across some problems. I guess this is what some 'investors' encountered. 

With Senior Housing, specifically Assisted Living Facilities, we no longer worry about the marketing is doing in real estate. Truly and humbly can say that, "I don't care." Well, maybe if I am buying, but even then the market locations intended have maintained their values. Not hyper-inflated markets.

It's simple, my tenant - Residents - are not dependent upon market conditions, period. They need a place to live and receive care. 

The business and real estate makes money when the real estate market is down, sideways, up, in spirals, it doesn't matter. The property will be there, because investing for the "property appreciation" like wholesalers and house flippers do, is no longer relevant. 

During times of recession Senior Housing has remained at a high 89% occupancy rate throughout the sector. 

From a Resident perspective, Economic Cycles or fluctuations within in Real estate has no affect to them or for them. Any and all monies that are being spent on housing, have already been preallocated or come from a funding source that is not intertwined with the economic conditions. 

Many fund their Senior Housing living from profits of the sale of the estates or pre-existing private insurances.

Definitely something to think about if you are contemplating a venture into the sector as a Owner/Operator or as a passive investor.