grab bars and other senior-friendly features and are geared to those who can live independently. > Active adult communities: Occu- pants of homes and condos in active adult communities usually must meet an age requirement but are still very active. Communities often in- clude amenities such as clubhouses, swimming pools and gardens. > Independent living facilities (ILFs): These facilities cater to seniors who are less active and may need some help with meals, housekeeping and transportation. Residents pay premium rents to cover these perks. > Assisted living facilities (ALFs): Seniors in assisted living facilities may require some additional assistance with daily activities such as bathing and dressing but do not need skilled nursing care. > Skilled nursing facilities (SNFs): Hospital-like, skilled nursing facil- ities provide residents with health care services, including medical care and rehabilitation, as well as assistance with daily activities. > Continuing care retirement commu- nities (CCRCs): A continuing care retirement community is a “one-stop shop,” offering independent living, as- sisted living and skilled nursing living arrangements within the same facility. PROPERTIES FOR INDEPENDENT SENIORS When most people retire, they can still care for themselves and want to lead active, independent lives. Later in life, they may need more help, leading up to skilled nurs- ing care. Based on that natural trajectory, the initial demand, as the population ages, will be for properties that can accommodate independent seniors.
That’s good news for investors because it isn’t much of a stretch to go from targeting singles and families to targeting seniors. You just need to think about their lifestyle and needs, says Manny Gonzalez with KTGY Group. Gonzalez specializes in building senior communities. Successful properties for independent seniors start with location, according to Gonzalez. Boomers tend to be active, so a property near restaurants, a neighborhood coffeehouse, parks and a grocery store would be desirable. Hiking and mountain biking trails nearby would also be a plus. Even active seniors, though, look ahead to when they may not be able to do as much physically, due to age or injury, so features like a walk-in shower, grab bars into the shower and ramps can be selling points. Also, living spaces should be on one level without steps—even a single step—up or down into a room. Gonzalez adds that Boomers love to entertain, so a large kitchen would be attrac- tive. Other popular features include storage space and pet-friendly amenities. These guidelines apply whether the prop- erty is a single-family residence or a multi- unit complex. With multi-unit complexes, though, seniors also look for a sense of community. Gonzalez recommends hiring a property management company that specializes in senior housing and can help foster that community through activities and social interaction. Historically, there have been few invest- ment opportunities beyond properties for independent seniors, but that is changing, according to Sharga, who sees a growing market in independent living facilities and assisted living facilities. Sharga says these facilities don’t have to be large or complicated to be profitable. You can purchase a single-family residence with multiple bedrooms and bathrooms and con- vert it into senior-friendly accommodations PROPERTIES WITH ASSISTANCE SERVICES
that offer simple housekeeping and meal services for five to 10 residents. Instead of receiving $1,500 per month for one family to live there, for example, you could collect $1,500 per tenant. There would, however, be additional costs for staff, insurance and other operating costs. And there are risks. Sharga points out that the industry is in its infancy, and no one knows for sure yet what the demand will be for this type of property. You also have to have some knowledge of the health care industry and local regulations pertain- ing to senior housing. “It’s less about knowing how to buy and renovate a property than it is about figuring out how to manage,” Sharga says. “This isn’t just collecting and cashing a check.” He suggests partnering on your first deal with another investor who has experience with independent living facilities and assist- ed living facilities and who can direct you to local property management companies that specialize in senior housing. PROPERTIES WITH SKILLED NURSING Your options may be limited when it comes to investing in skilled nursing prop- erties because they require a tremendous amount of cash to purchase and expertise to manage. For the average investor, real estate investment trusts (REITs) specializing in senior housing are usually the best route. But the demand for these properties will likely lag far behind the others. Ac- cording to a report issued by the Admin- istration on Aging, the majority of the nation’s senior population is projected to be relatively young (ages 67 to 74) until around 2034, when all of the Boomers will be over the age of 70.
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BY TERESA BITLER Teresa Bitler is a regular freelance contributor to Think Realty Magazine. Contact her at teresa@ teresabitler.com
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