Senior Housing: A Promising Real Estate Investment Option

Posted on Aug 4 2019

It's no secret that America is aging: Over the next 25 years, America's Medicare-eligible population will double to approximately 66 million people. The sharp rise will increase demand for healthcare services and housing.

Healthcare for the seniors will be covered in large part through the Medicare system, but housing remains both a challenge and an opportunity. The challenge is for the seniors and their loved ones who are trying to find decent, affordable housing. The opportunity is waiting for investors, many of whom are responding.

Out of all the real estate investment options, senior housing is one of the most promising. The top four reasons for making an investment in senior housing include:

1. Supply and demand - What has always driven other sectors of real estate investing affects the senior component as well. The simple supply and demand truth is that there are more seniors who need housing support than there are beds to accommodate them.

2. Timing - The inventory of senior real estate properties is ancient by modern standards. It is estimate that 58 percent of the 2018 senior housing is more than 17 years old 32 percent is older than 25 years. Today, seniors are demanding different accommodations and services from their housing options, which has created a void that needs to be filled.

3. Recession-resistant - No real estate investment is recession-proof. But senior housing is less dependent on traditional market driven factors such as the employment rate.

4. ROI - Over the past 10 years, investments in senior housing have outperformed all other types of real estate investments except for industrial. In 2018, the total return for senior housing real estate on over ten years was a whopping 10.52%. Smart investors are looking down the road to the next opportunity and have determined that senior housing is a low-risk, high yield option.

Investment options

Some key senior housing providers are publicly traded, including Capital Senior Living Corp. (CSU) and Brookdale Senior Living (BKD). Brookdale's stock has catapulted from $6.02 per share on June 3 to $8.17 on July 11.

Another option is an REIT such as HCP, which is focused solely on the healthcare sector and includes senior living facilities in its real estate portfolio. Like CSU, HCP is showing attractive growth with a year-to-date low of $ 29.15 just last April 17 but trading at $32.57 on July 12.

The bottom line is that senior housing is one of the top long-term real estate investment opportunities in 2019.

Looking to invest in Senior housing? We currently have a Class A - Assisted Living / Memory Care facility, available via online auction!

Visit FRE.com/293V2 for property details, downloadable due diligence materials and auction information.