The senior housing industry is booming, and investors are eager to get in on the action. With increasing life expectancy and baby boomers reaching retirement age, the need for senior living will only grow, making it a smart option for real estate investors with multifamily portfolios. But before you invest, it’s important to understand the different types of senior living facilities and how they operate.
One option is to buy an existing property. This is a lower-risk strategy, but requires you to work closely with an operator to ensure the building complies with all senior housing regulations. Another option is to build a new property. This involves sourcing land and hiring a developer to either convert an existing building or build from the ground up, adhering to all the specialized regulations for seniors living. Also read https://www.kentuckysellnow.com/we-buy-houses-elizabethtown/
You could also join a senior living syndicate or fund, which allows you to diversify your investment while maintaining a stake in the business. However, these types of investments typically require you to be an accredited investor, meaning you meet certain income or net worth requirements.
If you want to minimize your risk, the lowest-risk option is a REIT. REITs are publicly traded companies that specialize in operating incoming-producing real estate, such as senior living communities. Buying shares of REITs is similar to investing in stocks, and offers a lower-risk alternative to direct investment or JV ownership.
The senior living sector has outperformed most other real estate asset classes in the past 10 years, according to data from NCREIF’s National Property Index. This is not a surprise to those in the industry, as senior housing has historically proven to be an attractive and stable investment.
In fact, the only other sectors that have outperformed senior housing are hotels and self-storage. This is likely due to the fact that senior housing properties are considered to be “needs-based” assets, which are more resilient during economic downturns.
Whether you are an experienced senior living investor or a newbie, it’s important to take your time and research your options before committing capital to this unique market. At Sherman & Roylance, we have extensive knowledge of the senior living and care space and can help you find the right opportunity for your needs. To learn more, contact us today.
This article is provided for general information purposes only and should not be construed as legal, tax, financial or investment advice. Please consult an attorney, certified public accountant, or other professional advisor for individual advice regarding your specific circumstances.
This article was originally published on March 26, 2024. It was updated and republished on June 23, 2025. This article may contain affiliate links, but they are always clearly marked as such. For more information on how we use affiliate links, please visit our Disclosure Policy.
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