Assisted Living Facility Investments

 

Those interested in the senior housing industry often ask this question, while trying to decide if an assisted living facility is indeed a good investment.  In general, the answer is yes.

With so many assisted living facilities for sale, well-performing assets and turnaround facilities alike can become great senior housing investments. However, simply acquiring senior living property investments is not in itself the vehicle that generates high cash flow.

The Key to Success: Boots on the Ground

Assisted Living facilities in the senior housing industry always come with a full staff in place, but it may not be the staff you want to keep.

If you an assisted living facility that is performing well, it is important to keep the operational team in place during the transition. The managers and staff who run the day-to-day operations are imperative to the success and livelihood of the facility; they are the ones who create the value in your assisted living facility.

However, once you have acquired an assisted living facility investment, there is no guarantee that the existing staff will assimilate into your corporate culture. For this reason, you may need to replace members as you see fit.

Your team quickly becomes more important than the building and the market itself, so choose wisely and seek the proper guidance needed in order to make the correct decisions.

New Investors, Greater Returns

The senior housing industry has room for players new and old.  As the industry has risen to the rank of an institutional asset class; greener investors have the advantage of a stable well documented senior housing business.

Seasoned investors and operators reap the benefits of their long-term invested efforts. They already know the industry and what it takes to run a profitable business, their long term hold assets are experiencing historically high valuations,  along with healthy cash flows.

Assisted living facilities are different from skilled nursing facilities in many ways. However, those with experience in skilled nursing facilities are encouraged to diversify their portfolios and find assisted living facilities as a private pay revenue source.

Diversifying your portfolio is a necessary action as it allows for two different sources or revenue. While skilled nursing facilities rely on government reimbursed revenue, most of assisted living facilities receive their revenue from private pay sources.

Today’s Best is the New Norm

The fundamentals are as strong as ever and are expected to remain strong for a very long time. With the volume of seniors needing assisted living care, the demand for these healthcare properties overrules most uncertainties.

While high pricing may discourage people from making senior housing investments, there are too many opportunities to pass.  Senior housing cap rates and pricing are not only incredibly high but may also be the new status quo.

Anyone thinking seriously about buying healthcare properties should consult their preferred senior living brokerage for expert advice; The JCH Group is here to help.

The JCH Group is available as your healthcare brokerage for senior housing investments.  We offer a free business valuation to determine what an asset is worth. To meet your investment specialist, contact one of our experts for expert advice on your next step.

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