Misconceptions About Assisted Living - And Why Investing In It Makes Sense
Real estate investments can only be as successful as the respective industries and locales with which they are affiliated. As an extreme example, an investment in an outdoor cafe in the North Pole is certain to fail. An investment in a surf shop in Hawaii would be far more viable. Both are real estate investments, but they have little or nothing else in common.
At Precision Global Corporation, we are currently highlighting investment opportunities involving assisted living communities. Demand is surging, and the growth is expected to last for several decades. Adults 65 and older are projected to comprise 20 percent of the U.S. population by 2030, and while the percentage may level off thereafter, the absolute number of senior citizens will continue to rise, according to the Institute on Aging.
In addition to the growth potential, assisted living facilities are a great fit for a 1031 exchange investment. A 1031 exchange allows investors to defer capital gains taxes when they sell a previously acquired investment property, thus maximizing their investment in the new property.
However, there are some misconceptions about assisted living that may raise questions about the wisdom of investing in this area. Detractors may claim that residents of assisted living facilities will experience the following:
Loss of independence
Lack of privacy
Lack of visiting privileges
Quality of life issues
These are senior housing myths and nothing more.
Dispelling These Five Assisted Living Myths
Let’s tackle these assisted living misconceptions, one at a time.
Loss of independence: Relieved of home ownership responsibilities such as maintenance and chores, many assisted living residents GAIN independence and free time. Additionally, senior citizens with physical restrictions may gain independence with the help of available on-site physical and occupational therapists. An assisted living center also may offer an art studio, yoga center, gym, technology center or some combination of these and other amenities that encourage independence.
Excessive costs: The typical cost to live in an assisted living facility in 2018 was $4,000 per month, according to the well-respected Genworth Cost of Care Survey 2018. When comparing with the costs of staying in one’s home, be sure to include utilities, taxes, home maintenance, housekeeping, meals, entertainment, therapy and medical care. The cost to live in an assisted facility may be all-inclusive and may be less than it costs for receiving the same level of services at home.
Lack of privacy: Many assisted living facilities feature private suites. Residents can choose how much privacy they want.Lack of visiting privileges: Worries about not getting to see friends and family as often are unfounded. Residents often make new friends among their co-residents. Some folks even choose to live in assisted living facilities specifically to enrich their social lives.
Lack of visiting privileges: Worries about not getting to see friends and family as often are unfounded. Residents often make new friends among their co-residents. Some folks even choose to live in assisted living facilities specifically to enrich their social lives.
Quality of life issues: The perception that only the sick and dying move into assisted living facilities is among the most outdated of senior housing misconceptions. The excellent care available actually can help individuals who are in good health maintain their quality of life even longer than they otherwise might. To determine the standards of care at a particular facility, check state agencies for complaints, as well as reviews, Better Business Bureau, court records for any litigation, and health departments. There’s a wealth of information available.
At Precision Global Corporation, we focus on the management of general and limited partnerships for a variety of 1031 exchange properties. We strive to reduce investment risks and are the operator of most of our projects. If investing in the thriving area of assisted living is of interest to you, contact us today.