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Senior living – A new alternate investment in Real estate

Posted by webmaster on May 27, 2021

What is senior living?

Senior living projects or communities have been buzzing recently. Senior living communities are nothing but special housing communities catering to older citizens with special care facilities. These communities have multiple housing options with different care facilities. Older citizens are challenged with ageing and health issues and often special care. Senior living projects have exclusive infrastructure, amenities and lifestyle facilities that match the requirements of senior citizens that need the cushion of extra care, and support. These communities have been gaining a lot of traction in recent years as the demand seems to be rising.

Every aspect of senior living communities is designed keeping in mind older adults. Many regular infrastructural aspects like stairs, high cabinets, regular washrooms etc are not really comfortable to people as they age due to health issues. Daily chores like doing laundry, cooking, traveling for getting regular health check-ups get difficult for senior citizens. This is why exactly senior living communities are built. These communities have assistance available for everything needed to lead a comfortable life for older people. They also have dedicated health centers, with staff available at all times along with special care facilities and infrastructural support.

Real estate market for senior living

Things have changed since the onset of the pandemic Covid-19. Healthcare is a huge concern for many people and mostly to the older generations. As older generations are prone to more health risks and the increased need for health services established the need for quality, senior living communities have been coming into action.

Commercial real estate which was under boom and high demand pre-pandemic has faced some turmoil during these years. The volatility in the different sectors of the real estate market has led the investors to find more resilient options which have the capability to generate good passive income with stable performance. Senior living projects have become a safe haven for investors seeking the stability, regular rentals and good capital appreciation. Usually senior living projects are leased to operators for long-term such as 30-35, which is a very long tenant lock-in compared to commercial spaces. As the commercial markets are sluggish due to remote work situations, investors are more inclined towards care homes. The increasing elderly population, long term tenants, regular rentals, and high demand are all factors that are luring investment into the senior living sector of real estate.

Advantages of investing in senior living projects

Senior living projects have become the need of the hour in these uncertain times. Along with being built for a good cause in the society, these projects are also great investment avenues. Offering benefits that commercial real estate and other sectors of real estate are lacking, senior living investment options are emerging as excellent alternate investment opportunities. Let’s delve in and understand the benefits of investing in senior living projects.

High demand

As mentioned above senior living projects are in high demand currently. With lockdowns and uncertainty everywhere, the usual tasks like visiting hospitals, getting groceries, going for a walk etc have all become burdensome for elderly people. Senior living projects have all essentials available within the community so that the senior citizens can continue their life amidst these uncertainties without any hassle. Hence the demand for these projects is spiking up which works in favor of the investors. Factors like rising senior population, increased life expectancy also play out a huge role in demand for senior living spaces. Investors who are hoping for these investments early on can definitely make a fortune out of these investment opportunities.

Portfolio diversification

Senior living investments are a great way to portfolio diversification for investors. Being alternate investments offer stable returns these investments will add stability to the investors portfolio. Tenants with long lease lock-ins are also a huge advantage to the senior living projects. Covering up for the cons of commercial real estate disadvantages like hassle of maintenance, short tenant lock-ins, volatile market etc, senior living projects are a good alternate investment option to the investors.

Contribution to the society

Senior living projects are built with an intention of giving back to the society. Many investors believe in the cause of these projects and understand the need. The invested money gets utilized for the development of senior living projects with facilities which are much needed for elderly people. These investments are also a contribution to the society as the projects are being built with a main purpose of serving the senior citizens. Investors connect to these projects emotionally as they are investing in a bigger picture which is to serve the elderly.

Recession resistance

Senior living projects serve people belonging to the age 55 or above. This population is mostly retired and seeking comfortable housing. Hence events like recession have little to no impact on these projects. The demand for the housing options is not affected by the employment rates, income levels etc as the target audience is not involved or affected by these causes. Senior housing investments in real estate hence are recession proof. Investors who wish to add recession proof investments to their portfolio can invest in senior living investments.

Senior living communities are only bound to be growing in the coming years. With high demand from end users and need for health care support for seniors, these communities will be seen flourishing. If you have been considering senior living projects for investing or looking for a promising investment opportunity, senior living investments will be your best bet. Early adapters to changes in the real estate sector will also be able to make good returns with less risk. So now is the right time for real estate enthusiasts and investors to invest in senior living opportunities.

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