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  • Writer's picturePGC Team

Investing In Assisted Living Properties

Updated: Mar 29, 2022

Finding the right property to invest in is critical for any buyer. Many factors play a role in the type of real estate ideal for that individual buyer. In most situations, buyers need to find real estate fitting their budget, but also should consider the long-term growth potential and demand of the property or business long into the future. They need to buy what they understand or desire to be a part of someday, as well. For many, an assisted living investment is ideal. This high-demand type of investment property creates an opportunity for continual growth due to industry demand.

Why Investing in Assisted Living Facilities Tends to Be Ideal

There is a significant amount of demand for assisted living communities today. These locations provide a home to individuals who need more help and no longer can live independently. While they do not necessarily provide significant medical support, these communities handle many of the day-to-day needs of seniors. Further, as people continue to live longer, it is growing in importance to have locations capable of facilitating for these needs.

Research indicates there is a rapid need for assisted living facilities in the United States, creating an opportunity for investors looking for a property with significant demand. By 2026, there will be 71.5 million Americans over age 65. Many will require these services.

The Advantages of Investing in Senior Living Facilities

This baby boomer move into assisted living makes the investment here ideal. What’s more, it is possible to be a passive investor — meaning, owners do not have to spend a lot of time (or money) on the daily management of the space. The assisted living business model offers some key advantages hard to overlook:

  • It’s much like a single-family residence. Generally speaking, this is far more affordable to invest in than a large nursing home. 

  • It offers better returns and overall stability, unlike investing in a traditional rental unit for profit.

  • Multi-unit assisted living homes allow investors to collect rent from multiple families rather than having to count on a single person living in the space.

  • Converting properties into assisted living facilities is possible when these structures have a large footprint. By transforming them into a larger space, such as by adding bedrooms and bathrooms, it is possible to grow the value of the property significantly.

  • They work well as a part of a 1031 exchange. These properties remain in demand. Plus, by increasing the value of the structure, a 1031 exchange allows investors to minimize the capital gains otherwise paid for such improvements.

It is important to choose the right location and to ensure all compliance requirements are met. However, with so many Americans in need of quality senior living facilities, investing in assisted living communities like this also allows the investor to give back. There is no limitation on the long-term growth potential here, especially of well-designed and upscale communities that are attractive to seniors older than 65.

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