MAKINGAN IMPACT By the end of this decade, 24 mil- lion seniors in America will require long-term care, which is nearly dou- ble the current demand. This pres- ents a challenge as professionals in the long-term care and medical communities suggest that the cur- rent infrastructure in senior housing and medical assistance is not ready to handle this influx. Nevertheless, investment in these sectors will occur, it’s just a matter of when and who will be responsible for it. Social and public policy will inevitably change to help shape the solutions that will meet the needs of this generation of seniors. So what does this mean for the investor? The opportunity is two- fold. Those who place themselves in a position to provide quality housing for these seniors will undoubtedly benefit financially, but they will also be able to make an impact in their communities with their investment. The reality is that most seniors prefer to live at home, but when health issues deem that it is no lon- ger possible, then the need for long- term care is at hand. According to the Department of Health and Human Services, nearly 70 percent of seniors are expected to need some form of long-term care during their lifetime. This long-term care comes in many forms. Traditionally, nursing homes have been widely employed to care for the elderly, often due to financial constraints or the inability of family members to adequately care for them. However, this is an extremely unpopular option and most seniors would prefer to avoid this scenario. Moreover, if the past two years have taught us anything, it’s that packing large numbers of seniors into big facilities isn’t the best choice when health and safety are concerned.
WHAT’S THEALTERNATIVE? A growing number of investors are turning to residential assisted living, where large single-family homes are redesigned and repurposed to comfortably house 6-10 seniors in a home-like environment. An environ- ment that most seniors prefer to the large institutional facilities. The result is quality personalized care that affords independence; something that means a great deal to the baby boomer generation. Not only has this long-term care option shown an opportunity for investment with high returns, but it also meets a significant and grow - ing demand that will need to be met across the country. At this point, you may be think- ing, “But wait, I don’t want to take care of old people.” The reality is, as the investor, you don’t have to. Just like you would in any business, it’s all about hiring the right man- ager and team to make the busi- ness run smoothly. Only instead of simply owning a piece of real estate, the investor owns both the home and a profitable business that is providing a needed service. For many, it’s the perfect marriage of asset investment and the profitability of a service-produc - ing business in high demand. Regardless of what the market is doing, people will continue to age, and as they do they will need care and appropriate housing. This sector of the real estate market is primed for growth over the next few decades, all thanks to the baby boomers. •
THE DEMOGRAPHIC SHIFT It’s no secret that the United States is an aging country. One of the main reasons for America’s aging is the baby boomers. Historically, one of the largest generations, boomers have influenced the U.S. economy at every turn, and they are poised to do this yet again as they enter their golden years. By 2030, the last of the boomers will be 65, and according to projec- tions, Americans aged 65 and up will comprise 21 percent of the nation’s population; an increase from 16 per- cent today. Additionally, the number of Americans aged 85+ is expected to more than double by 2040. It may not seem significant in light of the overall population, but in relation to the infrastructure and senior hous- ing currently available, considerable investment will need to be made to ensure this age group has sufficient housing and care as they age. While some see this demograph- ic change as a looming crisis, many investors looking at these numbers are seeing the chance to be at the forefront of an investment boom. For many, it represents a potential shift from traditional single-fami- ly rentals, commercial rentals, and fix-and-flips in an already squeezed market to an asset type with decades of growth ahead. In the words of Warren Buffett, “A great investment opportunity occurs when a marvelous business encounters a one-time huge, but solvable problem.” This once-in-a-lifetime demo- graphic shift may have some people concerned, but others are seizing the moment, the chance to meet a grow- ing need, and placing themselves at the center of opportunity. With this change in tide, it might be time to rethink investing.
Isabelle is a graduate from Arizona State University, a former flight attendant, Disney employee and now works as the COO of the Impact Housing Group of companies, including Residential Assisted Living Academy.
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