Senior Affordable Housing
Senior affordable housing is a segment within the senior housing market. It is often overlooked or ignored because it does not generate the type of revenue private pay or Medicaid facilities produce.
Though it may not be the most idealistic addition, senior affordable housing can be an integral piece of any operator’s portfolio. In fact, many operators specialize in senior affordable housing assets or use them to positively diversify portfolios.
The question now becomes: How do I make senior affordable housing a good investment? Then, what do I do with it?
With proper expense management you can increase profit margins. This can be accomplished by squeezing and cutting costs in all departments.
At a minimum, senior affordable housing rooms should be semi-private, fitting two residents per room. This helps maximize revenue on a per unit basis.
Residents enter affordable housing knowing that the facility will not offer private rooms. Remember that you are making senior housing available to people who cannot afford private pay models. This makes senior affordable housing a fantastic PR move while still generating a profit.
Find the Facility Value to Match
If you have a prime piece of real estate, it wouldn’t make much sense to use it for senior affordable housing. For senior affordable housing to work as a profitable venture, the real estate value needs to be consistent with the facility’s profitability.
These will be less desirable or less attractive facilities. Senior affordable housing properties are often older and may be in need of more repairs or maintenance. In short, they will not be as nice as private pay facilities.
Do the math and the research to ensure that the facility and real estate you are acquiring conforms with the value a senior affordable housing facility will generate. Otherwise, consider a different healthcare use.
Use the Tax Benefits with Other Healthcare Properties
When you acquire and operate a senior affordable housing facility, the government typically provides tax credits. These tax credits are exceptionally valuable. They appear on real estate taxes or income taxes and state that you have provided senior affordable housing.
These credits can be used to offset taxes incurred from your private pay facilities or other more profitable facilities. Many operators use senior affordable housing tax credits in this manner to increase profit margins.
Choose the JCH Group for the Best Deals
in Senior Affordable Housing
Senior affordable housing should not go ignored. Though not particularly profitable, they are still valuable in many other ways. Used in conjunction with other healthcare properties, senior affordable housing can be one of the best decisions you make as an operator.
The JCH Group is a senior housing brokerage specializing in high profile and complex deals all across the senior housing market. Our team is dedicated to finding and assembling the best deal for your wealth and success.
The JCH Group is ready to help you acquire or sell any senior housing property of interest. To meet one of our talented agents, contact us at your convenience.