Here’s Why You Should Consider Investing in Senior Living

by | BiggerPockets.com

We all know how important having a retirement fund is, even if you’re decades away from reaching your golden years. One way to pad your retirement fund or make some money in the meantime might include investing in senior living. It’s not just paying for your own retirement — it’s investing in the kind of infrastructure you want to have access to when you retire.

Should You Consider Investing in Senior Living?

Let’s take a look.

Investment Risks

As with any investment, there is always some risk that needs to be considered. For 2018, the primary concerns for senior living investments include development and operating costs, construction activity, increasing interest rates, acquisition competition, economic changes, and regulation changes that could affect the market in the future.

While the market hasn’t changed recently for nearly half of the industry experts who were polled, many of them indicated it is taking longer for them to obtain a contract after an offer is made.

It is important to note that these polled experts work on all sorts of senior living investment projects, from retirement communities and assisted living facilities to independent living and memory care facilities.

Related: How to Make $20,000 Per Month By Investing in Assisted-Living Homes

Senior Living Communities

Retirement homes aren’t the only option for the aging members of our population anymore. Senior living communities, which allow senior citizens to live mostly independently with access to a variety of amenities, provide an alternative for individuals or couples who can no longer safely live on their own but don’t want to relegate themselves to assisted living facilities.

These communities provide everything from on-site health care services to meal plans to wellness programs and everything in between. From the outside, it might not look any different than any other small town you might pass on the highway — there are stores and businesses and parks. These communities are just designed to meet the needs of senior citizens.

Of course, to create these senior-friendly communities, investors are needed.

Should You Invest?

Why should you consider investing in senior living facilities if it will be years or decades before you can take advantage of them?

First, these are long-term investments. You don’t have to invest in a single project or a single facility. By investing in broad funds that focus on senior living in general, you can turn your investment into something long term that you can pay into throughout your life — and get returns from during your investment period.

If you are nearing your retirement age, you might consider investing in a housing development opportunity that you’ll be using sometime in the next decade. It is estimated that upward of six million people will need to utilize some form of senior housing in the next 20 years. With nearly 10,000 baby boomers turning 65 every single day, without people who are willing to invest in senior living, we could be facing a new kind of housing crisis.

Related: Senior Housing: A Better Option for Successful Wealth Succession?

By 2029, just 11 years from now, it is estimated that senior citizens will make up roughly 20 percent of the population. Investing now in senior living facilities in all their forms could turn into a very lucrative investment in the next decade. In fact, it already is — it stays steady as the economy shifts up and down, with a 13.6 percent return on investment in the previous seven years, and a 12.16 percent return within the past year.

The returns on this kind of investment are often higher than other kinds of real estate, and they stay steadier during economic up and downturns.

With more retirees choosing senior living communities over assisted living facilities or nursing homes, the need for this kind of investment will continue to grow over the next two decades. Investing in senior living isn’t just good for your wallet in the short term. It is a way to invest in the kind of infrastructure you’re going to need when you finally reach those golden years. If you have the funds to start investing, senior living is a great choice — it offers better returns in the short term and a more comfortable retirement in the long term.

Would you consider investing in senior living?

Why or why not? Share below!

About Author

Anum Yoon

Anum Yoon is the founder and editor of the millennial money blog, Current on Currency.

3 Comments

  1. Marie Fries

    This just opened my eyes as a new avenue to investing. How do I get started? What type of research would I need to do? I live in Massachusetts and everything here is booming. Also, I am a newbie looking to start my Real Estate journey.

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