Why Experienced Investors Are Choosing Healthcare Real Estate
Experienced investors are making a shift to investing in healthcare real estate funds. What’s driving this new wave of investment? What do they know that you should too?
Check out these six reasons sophisticated investors are finding this space magnetic.
1. Riches Are Found In Niches
The greatest and most sustainable wealth is found in specialization and niches. This creates a stronger market, filled with sophisticated players, where value is easier to retain.
One of the biggest threats to other sectors, and reasons some asset classes have boomed and busted so tragically is the wave of inexperienced and amateur investors they attract.
2. Moats & High Barriers To Entry
Sophisticated investors that have been successful in their own business ventures understand the necessity and value of choosing to invest in areas with higher barriers to entry and moats that protect them.
Not every individual watching an infomercial or reality TV show is going to be able to participate in this asset class.
3. Real Estate Is Becoming More Than Just Bricks & Mortar
Any old building with a roof and four walls used to be able to make a solid investment. That’s changing. Success in real estate is increasingly becoming about the experience being offered. This is true of residential communities, short term rental homes, office buildings, and apartment complexes.
The experience is where much of today’s value and cash flow is being created. In this space it is not only about aesthetics, but essential services being provided.
4. Lots Of Value-Add Potential
Acquiring existing senior housing, assisted living facilities, and nursing homes can provide immediate cash flow streams and passive income.
Existing facilities also offer a lot of value-add gain potential. Perfect for making leaps in wealth and maximizing ROI.
This space is ripe for updating older buildings, expanding units and square footage as zoning rules encourage more density, offering add-ons, and upgrading the level of service being offered.
5. Economies Of Scale
Most real estate investors inevitably end up moving up to multi-unit investing of some type to enjoy the superior margins found in larger scale properties.
6. Supply & Demand Economics
Our population is aging fast. Our seniors are increasingly moving to facilities like these for company, comfort, affordability, and ease, if not out of necessity. At the same time, existing supply is very limited, and building new takes years to come to market.
