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Are senior housing investments, assisted living, and housing for the elderly profitable in 2023?

According to the U.S. Census Bureau, seniors (those over 65) currently make up 16% of the population in America. That number hints at your likelihood of succeeding with real estate investments. Why? Because more than 70 million seniors are making housing decisions — there are several prospects for real estate investors and developers. Here are a few things to consider when looking into real estate options if you’re considering investing in real estate that caters to this large group.
First, what forms of senior housing investments are there? The term “senior housing” refers to a broad category of housing complexes designed for long-term occupants above a specific age. Before investing in one of these institutions, it would help to comprehend their specialties and how they differ.
Assisted Living Facilities
For individuals with disabilities or those unable to live independently, assisted living facilities are built with private or semi-private units. These facilities offer assistance with daily living activities like bathing, grooming, eating, dressing, using the restroom, shopping, and managing money. They also work with outside healthcare providers to ensure residents receive the care they require and the supportive services independent living offers. Due to differing state laws, various assisted living facilities have variations in the services and degree of care.
Independent Housing Communities
Assistive services, including meals, housekeeping, laundry, exercise classes, social activities, and transportation, are typically provided along with these ones- or two-bedroom apartments with kitchens and laundry rooms. Some, however, are purely residential, with no provision for extra services, housing persons 55 years of age and older.
Nursing Care Facilities
Nursing care facilities, sometimes known as “skilled nursing facilities,” provide care for patients with severe medical conditions, including stroke patients or those suffering from neurological disease. About 1/4 of nursing care residents stay for less than three months, making short-term stays more common.
Memory Care Facilities
Seniors with Alzheimer’s disease and other forms of dementia are the focus of memory care facilities. Technically and professionally, nurses working in memory care facilities differ from those working in a standard assisted living facilities in their ability to care for patients. Providing a safe atmosphere for residents is a key requirement for memory care facilities’ experienced staff. As a result, these facilities offer better potential for revenue and profitability than other types of assisted living facilities, as their tuition and premiums are significantly higher than those of typical assisted living facilities.

Why Senior Housing Investments Are Profitable in 2023

Given the enormous number of potential customers, senior housing may be a lucrative real estate market for investors in 2023. The Population Reference Bureau estimates there are 76 million baby boomers in the U.S. The baby boomer generation’s youngest members are just entering their mid-60s, while the oldest are approaching their mid-70s.
According to the “National Investment Center for Seniors Housing & Care,” senior care and housing is the only commercial real estate asset class that saw positive rent growth during the Great Recession. The class is somewhat “crisis resilient” because it is a needs-based investment where tenants depend on the amenities and services offered. This makes senior care and housing a reliable investment choice for anyone looking for opportunities that will weather economic downturns.

Benefits of Senior Housing Investment in 2023

The benefits of taking advantage of the expanding baby boomer home market have already been demonstrated. So, what are the benefits of investing in this real estate type? If you’re considering purchasing or creating senior housing, consider the following benefits and factors.
Low Supply, High Demand
10,000 Americans turn 65 daily, according to a survey by the American Senior Housing Association (ASHA). Given this number, ASHA predicts that between 2021 and 2024, seniors will need 60,000 new housing units per year on average. Between 2025 and 2040, it is anticipated that 100,000 new units will need to be constructed annually. The housing supply still needs to meet the demand for senior living. Therefore, you can make a sizable profit in this market as an opportunistic real estate developer.
Limited Competitors
Most real estate investors only search the industrial and new home markets; they pay no attention to the senior housing market. They have made a grave mistake there, but as a real estate investor, this could work to your advantage extensively. You are in a prime position to buy houses cheaply in a market with little competition because there aren’t as many offers to push up the price of real estate purchases.
More Active Spaces
In contrast to typical apartment buildings, senior housing allows for long-term residency. According to AARP research, older person is much more likely to live in the same place for the rest of their years once they have established roots there. Higher occupancy rates and properties with continuous cash flow are the results of this.
Great Potential for Growth
As previously mentioned, the aging baby boomer population is booming. Senior housing offers tremendous growth potential as the population of elderly grows steadily. As a wise real estate investor, you may anticipate that demand for housing among older tenants will rise over the coming years.
Should You Invest in Senior Real Estate?
Only you can answer that question. However, senior housing can be your next best investment if you’re trying to enter a new market with a strong growth outlook. These statistics and insights about senior living real estate investing will help you properly consider this underappreciated property market area.
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