Why Young People Need to Start Investing in Senior Housing
Out of sight, out of mind. Most of us don’t like to think about aging, and when we do, we often overlook the idea of long-term care. As someone in my late 20s, I can say I rarely encounter other “young” people in the senior housing investment space. In my opinion: they’re missing a huge opportunity. Not only is senior housing a smart and reliable asset class, it offers one of the best returns you can find—even higher than you can expect from the average S&P 500 investment. The following are a few reasons younger people should start thinking of investing in senior housing now.
It pays. The S&P 500 average annualized 10-year return is 7.25%. The average annualized rate of return for an investment in senior housing over that same period is 10.5%. Assuming these rates are achieved moving forward, placing an investment in senior housing will produce 44% more profit than an investment in the more volatile S&P. Where would you rather put your money?
It’s a hot industry. The population is turning gray. By 2030, 1 in 5 Americans will be over the age of 65. By 2035, those 65+ will outnumber those under the age of 18 for the first time in history. All of us will need comfortable, safe, accessible places to stay. This isn’t just a hot investment now. It’s going to remain hot for decades.
There are numerous ways to invest. Depending on how much money you have to invest, and how long you’re willing to part from it, there are numerous different ways to invest in senior housing. If you’re starting out, try using a crowdfunding platform, which typically offers smaller investment thresholds. If you prefer to keep your capital liquid, try a publicly traded healthcare REIT. Or, if you’ve got a large sum of money and you know you won’t need it for a while, consider a private equity fund. In all cases, do your research before investing.
You’re making a difference. How many industries allow you to make such a direct impact in someone’s life? Senior housing investment ensures there is adequate, safe, comfortable housing available for all of us, for years to come.
Not every senior housing investment is created equal. Still, there is tremendous potential for younger investors to make an incredible return in the industry—if only they’re willing to face the aging process.
Interested in learning more about senior housing investment? Download our 2019 White Paper outlining the dynamics of the senior housing industry.
Quinn Brewer is a communications expert for Senior Living Fund, a private equity company that invests in quality senior housing opportunities nationwide. He lives in Kansas City and can be reached at [email protected]