Nursing Home Investments
With our current robust nursing home market, and with more and more people getting involved in the nursing home business, making the right match between investor and facility can give the transaction the head start it needs to succeed.
It is crucial that in the acquisition process the operator and investors involved are clear on what they are looking for in a nursing home facility or other healthcare properties that are available in the market place.
The two most important questions to ask yourself are:
- What kind of returns do we want?
- How risks adverse are we?
Gathering as much information as possible to help narrow down the choices is of utmost importance. Doing so in the beginning of the process results in a refined list of available assets that will save time, money and headaches.
Product Types in the Nursing Home Industry
Independent Living (IL)
Independent living facilities are perceived to be the lowest risk investment in senior housing investments. However, history has shown that IL is the first to experience setbacks in down cycles and the last to recover. Because independent living facilities are not need-driven, in hard times, this is the first expense to go, resulting in an ever-fluctuating resident census and profitability.
Assisted Living (AL)
Assisted living facilities derive their income from private pay and government reimbursement, although it is rare to find both payment models present in the same facility. These facilities require more operational skills as they provide a greater degree of medical assistance than an IL. Because assisted living facilities provide services that are more need driven, they do not experience the same type of turbulence in down cycles as independent living facilities. They typically provide greater profitability on a per unit basis than IL.
Memory care facilities make up a small but growing portion of the senior housing industry. Due to the higher level of care required for residents, the income rates are excellent, making it a favorite among investment specialists. However, because the pool from which residents are drawn is smaller, there can be challenges in over bedded markets.
This particular type of assisted living investment is perfect for the investor who wants a larger healthcare component with a smaller interest in real estate.
Nursing home for sale require the highest level of medical care for patients and operational experience. These nursing home investments rely on government reimbursement with little to no private pay. Because of this, investment specialists regard nursing home facilities as higher risk senior housing investments. Simply put, there is no guarantee that reimbursements will be made or at what level. Reimbursement is regulated by politicians, which can change with the stroke of a pen. However, cash flow can be very attractive in nursing home, so the investor who is willing to take the risk most likely also will experience a high return.
Your Next Housing Investment at the JCH Group
The JCH Consulting Group is responsible for some of the most lucrative senior housing investments in the nation and our team offers expert insight in making the right match between investor and facility which gives the transaction the head start it needs to succeed. Call us today for a free business valuation so that your next investment in the senior housing industry is all that you expect and more.
To learn more about how to buy healthcare properties from the preferred investment specialists, contact us at your convenience.