As our population ages, long-term care becomes increasingly important. The demand for quality assisted living facilities is growing, which is good news for investors.
This escalating demand presents a potentially profitable opportunity for investors. As more and more families seek out quality care for their aging loved ones, investors in this sector stand to benefit.
Before investing in assisted living facilities, it’s best to examine the benefits, potential drawbacks and look at a balanced analysis to help you make an informed decision.
What Is an Assisted Living Facility?
An assisted living facility is a residential housing option designed for older adults who require assistance with daily activities but do not need the level of medical care provided in a memory care or respite care community. These facilities offer a supportive and safe environment where residents can receive personalized care, including help with bathing, dressing, medication management, and meal preparation.
Assisted living facilities typically provide accommodation, communal dining areas, social activities, and access to healthcare professionals. The goal is to promote independence, enhance seniors’ quality of life, and support the well-being of residents while offering a sense of community and support.
The Benefits of Assisted Living Facilities
Apart from an aging population, several other reasons merit investing in assisted living facilities.
One key factor that makes assisted living facilities an attractive investment is the growing demand for senior care. The 2020 census found that around 1 in 6 people in the United States were 65 and older.
A steep rise in Alzheimer’s disease is another reason for the need for senior care. The number of Americans living with Alzheimer’s could reach 13.8 million by 2050.
With the current population growth of 65 and older, the need for quality long-term care continues to rise. Another reason for this is longer life expectancy, with the average U.S. life expectancy having increased to 78.6 years in 2017. This provides a stable market for assisted living facilities, projecting a steady stream of potential residents into the future.
Assisted living facilities generate revenue through monthly fees for the services provided. These fees typically cover accommodation, meals, assistance with daily activities, amenities, and access to healthcare professionals.
The steady income generated from these fees can make assisted living facilities a lucrative investment. However, this can depend on the effectiveness and efficiency of your management team.
Senior living management from Distinctive Living can help with operating procedures for every aspect of building an assisted living facility, including:
- Third-party management contracts
- Turnaround operations
- Community acquisition support and operations
- New development and lease-up communities
- Locating and creating partnerships
Favorable Investment Returns
Assisted living facilities have the potential to provide attractive investment returns. As demand for quality senior care increases, well-managed facilities can bring consistent revenue and profitability.
Moreover, with a shortage of senior care options and long wait lists, the potential for higher occupancy rates further enhances investment prospects. Assisted living facilities are considered essential services and rarely impacted by economic downturns and thus may be considered recession-resistant.
Diversification & Real Estate Investment
Investing in assisted living facilities allows for the diversification of investment portfolios. These facilities provide exposure to the real estate market while also offering the opportunity to capitalize on the growing senior care industry. This diversification may appeal to investors looking to balance their portfolios and mitigate risk.
Considerations & Drawbacks
Despite the many benefits of investing in assisted living facilities, it’s imperative to consider some of the drawbacks.
Assisted living facilities are subject to various regulations and licensing requirements that can differ from state to state. Compliance with these regulations can be costly and time-consuming.
Distinctive development can help you thoroughly understand the regulatory landscape and ensure that the facility is operated in compliance to avoid potential issues.
Running an assisted living facility involves managing staffing, maintenance, resident care, administration, and more. It requires a dedicated team of professionals in healthcare, hospitality, and management.
Operations at Distinctive Living help with management services and operational complexities to help your community run smoothly.
Get Expert Advice & Help with Your Investment
Investing in assisted living facilities is about providing supply for demand and generating financial returns. But it’s also providing a safe and comfortable environment for seniors who need assistance with daily living. In this way, it can be a rewarding endeavor both personally and financially, making it a good investment.
Investing in assisted living can offer numerous benefits, such as a growing market, revenue potential, favorable returns, and portfolio diversification. Conducting thorough due diligence, seeking expert advice, and carefully analyzing the specific investment opportunity is essential in making an informed decision.
If you’re considering investing in assisted living, contact the Distinctive Living team. We can provide guidance and help you assess the investment’s viability, so you can make a well-informed choice that aligns with your financial goals and values.