There’s no picture-perfect investment.
No matter how strong the market demand is or how weak your competitors are, for senior housing investors, each portfolio carries its own share of risk.
While some risks are small, others are weightier. For instance, purchasing a property in a less-than-ideal location could be less significant than acquiring several properties in oversaturated markets.
When it comes to senior housing investors’ strongest concerns, the CBRE report U.S. Seniors Housing & Care Investor Survey Update | Winter 2018 sheds light on what investors think is their greatest threat.
In this article, we’ll unpack what the report revealed about senior living decision-makers.
Keep on reading to discover senior housing investors’ greatest concerns and the key takeaway for your own portfolio—especially if you have poorly performing properties that keep you up at night.
Two Top Concerns for Senior Housing Investors
McKnight’s Senior Living, reporting on CBRE’s survey, indicates that survey participants had several options for their top concerns.
However, according to the article, the overwhelming majority of participants cited one of two top concerns.
Here’s what the news agency revealed…
- For 35% of surveyed investors, property-level costs for operating and developing senior housing properties outweighed other concerns.
- For 30% of surveyed investors, oversupply in the market was their top concern.
McKnight’s Senior Living lists other responses from the survey. However, these garnered comparatively meager attention—with the third most popular concern (rising interest rates) cited by only 12 percent of participating senior housing investors.
The Common Denominator in Investors’ Concerns
Whether you have a stake in a large operation or a small portfolio of properties, perhaps you can relate to the survey results.
Perhaps you dread rising operating costs. On the other hand, some of you might find yourself anticipating increased competition.
And—at first glance—these two worries may appear quite different.
But both concerns have a common denominator…
Over 60% of senior housing investors are concerned about factors that negatively impact their profit margins.
After all, the heart of savvy investing is maximizing your reward and minimizing the risk of low returns. Rising costs and weak demand lower these margins…albeit in different ways.
The One Question Senior Housing Investors Should Ask
These senior housing investors didn’t misplace their concerns; cutting costs and steering clear of competition are important.
But avoiding these risks has its limitations.
Food costs can unexpectedly rise due to a drought. Other investors can easily take a slice of your market. A promising property can quickly turn sour, leaving you with fewer Zzzz’s than before.
In reality, your net operating income is impacted by a number of variables outside your control.
The good news is, the difference between growth and stagnation can be asking yourself the simple question…
Am I minimizing the risks I can control?
At Bild & Company, we’re passionate about empowering senior housing operations to achieve growth no matter their situations.
Contrary to conventional wisdom, we understand that the solution to rising costs, increased competition, and other challenges aren’t lowering rents. It’s about focusing on the aspects of growth that you can control, such as…
- How you’re leveraging the intrinsic value of your properties.
- How you’re driving occupancy and revenue at the site level.
- How qualified your on-site talent and regional directors are.
Face your top concerns confidently when you invest in strategies that produce ROI, even in difficult market conditions.
If you’re ready to increase revenue for your portfolio, partner with Bild & Company.
Our team of senior housing experts has the expertise you need to improve your net operating income, grow your profit margins, and satisfy your stakeholders.
We’re always ready to talk. Give us a call at 1-800-640-0688, or get in touch online.
