Senior housing is in demand.
A recent survey by the National Real Estate Investor and NIC reports that senior housing investments outperformed apartment, industrial, office, hotel, and retail investments in attractiveness.
And, if you’ve had success with other real estate investments, maybe you’re ready for a slice of the pie.
Before you sink your hard-earned dollars into developing senior living communities, you need to realize that prior real estate experience doesn’t equal future success.
The senior living industry comes with a unique set of challenges, and understanding these can be the difference between a lucrative new development or a development that jeopardizes your investment.
Keep on reading to discover the 3 deadly mistakes that can wreak havoc on your new development if you’re not careful.
1. Don’t Assume Senior Housing Is Like Other Markets
While your background in real estate gives you an edge, you can’t treat senior housing like other properties and sectors.
Senior housing has distinct characteristics, and failing to incorporate them into your decision-making can undermine your profitability.
Here are a few things that make your new development unique…
- The needs of your target audience. While many real estate investments involve lodging, senior living communities go beyond simply providing a place to live. The seniors at your properties have sensitive needs that require everything from transportation and medical assistance to meal preparation and event planning. You’ll need to recognize these needs (as well as those of the adult children who act as decision-makers) if you want to fill beds at your communities.
- The length of stay at your communities. Another key aspect to recognize is the length most residents will stay. For instance, AssistedLiving.com reports that the average length of stay for assisted living residents is 22 months. Now is the time to look beyond your short-term objective of securing leases and examine your long-term goals. If you want to make your investment a success, you’ll need an infrastructure to supply your community with a steady stream of residents.
- The key team members involved. Attracting senior living residents will necessitate team members who understand your future residents and can meet their needs.
2. Don’t Neglect Investing in Your Top-Line Revenue
Creating a beautiful and inviting community doesn’t happen by accident. It requires an investment in construction materials, labor, landscaping, furnishings, and more.
However, it’s just as critical that you invest in an infrastructure that will place residents in apartments.
It doesn’t matter how well groomed your community is. Beautiful rooms won’t secure residents, and realizing you don’t have enough leases before your grand opening is frightening.
Before you leap into the senior housing market, ensure you have a revenue-generating strategy complete with…
- Professionals who are trained to drive top-line revenue.
- Clearly defined procedures for securing move-ins before opening day.
- Established systems that ensure accountability to meet your growth goals.
3. Don’t Think a Management Company Is a Magic Bullet
When you’re new to senior housing, it’s easy to look for a quick fix for your information gaps in a senior living management company.
While a seasoned management company can play a key role in your success, here’s what you need to realize.
More often than not, these organizations are experts in operations—not in top-line revenue growth.
No matter how experienced your management company is or what promises they make, most are not equipped to drive top-line revenue.
Relying on a management company isn’t a magic bullet for occupying apartments, and you can’t expect it to offer the expertise of an organization that’s devoted to increasing senior housing occupancy.
When it comes to creating and executing a revenue-growth plan for your new senior housing development, rely on Bild & Company.
For nearly two decades, we’ve empowered senior living communities to net up and grow, and we’re here to ensure you reap the financial rewards of your new development.
If you’re ready to tap into our senior housing expertise, we can set up a call to discuss your properties and the growth goals you want to achieve. Simply contact us online or call us 1-800-640-0688.