Why Invest In Senior Housing
Updated: Mar 29, 2022
Senior housing projects seem to be popping up everywhere. It’s not by happenstance. Long before construction crews begin building these residences, numbers are crunched, and someone determines the project makes for a good real estate investment.
The numbers can be staggering. Consider that about 10,000 baby boomers turn 65 every day — and that will continue for at least another 10 years or so, according to estimates. Nearly 100 million Americans will be senior citizens by 2060 — representing nearly one-fourth of the U.S. population.
They all have to live somewhere, and that translates to investment opportunities.
Senior Housing Options
While there are some circumstances that are unique to almost everyone’s living arrangements, senior housing can be broken down to a few primary types. These include:
Aging in place, with seniors remaining in the homes, condos, etc., that have been their primary residences
Independent living communities, typically reserved specifically for senior citizens who are still capable of living on their own and wanting to do so
Senior facilities where some level of needed care is provided — such as assisted living, memory care or skilled nursing facilities
It’s not uncommon for senior citizens who are independent at 65 to require a move to a care facility at a later stage. After all, an American who reaches age 65 can expect to live another 20 years, government statistics show.
The Benefits of Investing in Senior Housing
Some measure of risk is inherent in nearly every type of investment. Even so, there are myriad differences between pure gambling and savvy investing. Being able to put data and demographics on your side — like the numbers above — can be extremely beneficial, especially in real estate investing, which depends heavily on trends.
The growing demand for senior housing is far from the only benefit of investing in this area. There can be great tax advantages, such as doing a 1031 exchange. This type of investment allows you to defer capital gains taxes on the sale of a property as long as a qualifying exchange for another investment property follows. Over time, the benefit is like compounding interest — larger amounts are invested because sale proceeds have not been set aside for taxes, and subsequent gains thus are greater.
Opportunities Available Now
At Precision Global Corporation, we’re capitalizing on the demand for senior housing with investments in a series of 1031 exchange projects. Tapestry Lakeshore Drive, Senior Care (in Tallahassee, Florida) is doing very well. New developments are available in Texas, Florida, Pennsylvania, Ohio, Illinois and New Jersey. Many of them are assisted living facilities.
It’s critical to target the right markets for these types of investments. Existing occupancy rates and demographic projections are good places to start. For instance, in developing the Tapestry of Tallahassee, it was important to know that the occupancy rate for senior living centers in Tallahassee is 97 percent, and the senior population is growing.
Yet another benefit associated with our current projects: When you participate in a 1031 exchange investment with us, we are your partner — our money is at stake along with yours. We operate most of our projects and acquisitions. For that reason, you can trust that we look to remove as much risk from the investment equation as possible, relying on solid management principles.
If you’re interested in learning more about senior housing investments or 1031 exchange opportunities, contact us today.