More than 46 million Americans are currently 65 or older. And by 2050, that number is projected to explode to nearly 90 million. If you're a real estate investor, that's a significant population trend you may want to pay attention to.
Let's take a look at what senior housing is, as well as what benefits it can offer residents. Then we'll explore some recent developments in the sector and consider whether this might be a good real estate investment opportunity.
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What is senior housing?
Senior housing, or senior living, can include everything from assisted-living facilities to independent living apartment communities. A wide spectrum of options is available to meet the vastly varying needs of those meeting the definition of a senior. The senior age group has no set age for all purposes but is generally considered beginning between ages 55 and 65.
Senior living apartments often include perks designed to make life a little easier, like laundry and housekeeping services. Sometimes meal packages are available as well. These apartments tend to be designed with limited mobility in mind and may include features like lower cabinets and walk-in tubs. Some also have full-time medical personnel on staff who tend to the residents as needed.
And as many seniors are on a fixed income, it's helpful that these communities often cost seniors less than their prior living arrangements, especially if they were still living in a larger-than-necessary family home and dealing with all the associated upkeep, yard work, and maintenance.
But for those concerned about the well-being of a senior family member, the benefits of a senior living community can extend well beyond practical considerations. Study after study continues to demonstrate the positive impact of social connection on health and longevity, and senior communities can be a wonderful way to help seniors stay social well into their golden years.
These communities often feature amenities that tend to draw people together naturally, like swimming pools and recreation centers. And many employ full-time activity planners who schedule games, parties, classes, potlucks, and other festivities.
Is now the time to invest in senior housing?
The height of the pandemic was an incredibly difficult time for most commercial real estate, and senior housing was certainly no exception. The usually positive socialization encouraged by these environments became a negative as many residents got sick, and necessary social distancing halted that benefit residents had previously enjoyed. Some concerned family members even withdrew residents from these facilities and took them home to stay with them. But by late last year, real estate investment trusts (REITs) with significant holdings in senior living were already showing increased residency numbers.
The return to something closer to normal in our day-to-day lives combined with the coming dramatic boost in the senior population could make right now an excellent time to invest in senior living communities. If you agree, you may want to check out some healthcare REITs that own senior living properties. It certainly doesn't look like this sector is going anywhere anytime soon.
