Investing in Senior Housing? Here are 3 Keys You Should Know
Prior to the onset of the coronavirus pandemic, market speculators in the real estate investing sector saw 2020 as a great year for senior housing.
With the bulk of the boomer generation retiring this year and in the near future, independent living communities, apartment complexes, and memory care communities are supposed to sell like hotcakes. That said, senior housing has also become a hot market for investors willing to cash in on the increasing demand for this asset class.
It may take some time before the sector stabilizes, but one thing’s for sure, the senior housing market will still see a consistent rise in demand. Investors will only need to stick to their guns and consider these important takeaways:
1. Lower interest rates
In response to the coronavirus crisis, the Fed decided to slash interest rates to keep the American economy afloat. With mortgage rates falling to new lows, investors — especially those just starting to build their portfolios can access — much-needed financing. However, this will depend on whether interest rates will remain low in the long-term.
2. Availability of care services
The senior housing sector took a hit when it was revealed that the country’s first coronavirus cases were detected in retirement homes. The disconnect has only stoked a greater demand for health facilities and other features that coincide with the new normal. We can expect the demand for health services to support seniors living communities to rise as the pandemic might stay for a little longer within the year.
3. Do a great deal of research
As with any other investment strategy, your success in the senior housing sector will depend on how you act on data that’s out there. Considering that communities are not fully stable even as lockdown measures are lifted, investing in such products as senior cohousing and independent living homes requires caution. Check for positive fundamentals and work with local brokers so you can find assets you can definitely work with.
Senior housing offers ample opportunities for first-time investors, but the information is just as important as resources.
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