Rental Property TypesIs a Senior Housing Investment a Good Idea in 2020? by Charles Mburugu June 15, 2020June 15, 2020 by Charles Mburugu June 15, 2020June 15, 2020Thinking of expanding your real estate portfolio? Consider investing in senior housing. The increasing demand for senior housing is attributed to ‘Baby Boomers’ (people born between 1946 and 1964). According to census.gov, 10,000 Baby Boomers are crossing the 65-year threshold every day. The 2020 census revealed that the population of retirees is about 73 million. By 2030, it is projected that 20% of US residents will be senior citizens. This means that senior housing could end up being a very profitable real estate investment in the next decade.Related: How to Build a Diversified Real Estate PortfolioWhy Is Investing in Senior Housing Smart?Putting your money into senior housing could be a very wise move. So, why is a senior housing investment a good idea in 2020 exactly?Low competition – Senior housing real estate is a hot market that most property investors are not paying attention to. Not only will you face less competition when trying to land a real estate deal, but owning senior living investments means that you will not have much competition when looking for buyers or renters.High return on investment – Renting out to retirees can be very lucrative. A recent report by the National Council of Real Estate Investment Fiduciaries (NCREIF) revealed that the ROI for a senior housing investment has consistently been around 13%.High occupancy rates – Due to modern healthcare, life expectancy has increased greatly. And generally, seniors remain in one place once they find their retirement homes. This means a higher occupancy rate, and ultimately, cash flow properties.Growth potential – The senior housing market has incredible growth potential. With the increasing number of aged people, senior housing investors will always have tenants that require housing. You can start by investing in one senior housing investment type, and then diversify to other housing types.Related: Why Retirees Are the Best Investment Property Tenants and How to Accommodate ThemIf you now find yourself thinking it wise to invest in senior housing, we can offer you some guidance:Senior Housing Investment Options When it comes to a senior housing investment, there are different types of real estate investments you could consider. However, the terminology used for different types of senior housing investments can vary from region to region. For instance, the term ‘assisted living’ could mean one thing in one country or state, and something different elsewhere. Generally, the different kinds of senior housing vary depending on the level of care provided.Here are the most common senior housing investment options:Aging in place – This refers to a situation where a senior continues residing in their current home. The home can be modified to address mobility issues, and health care professionals can be called whenever there is a need. Aging in place is usually cheaper compared to any other senior housing option.Age-restricted communities – This is a housing option where residency is limited to individuals over a certain age. Residents could live in an apartment, a townhouse, a condo, or single family homes. Some age-restricted communities are designed to cater to people with specific interests. For example, there are those built close to universities for retired professors and those that want to interact with an intellectual community.Assisted living – In assisted living facilities, residents have a private bathroom and bedroom, but share all other areas. Usually, such facilities provide meals, laundry, transportation to doctor’s appointments, recreation and exercise activities, and housekeeping. They could also have onsite entertainment venues and beauty shops.Nursing homes – These are facilities that offer intense medical care. Nursing homes provide laundry services, transportation, meals, and housekeeping. They also offer 24-hour supervision and medication management.Continuing-care retirement communities (CCRC) – CCRCs incorporate several types of senior housing options. For example, a continuing-care retirement community could have nursing homes, assisted living facilities, and senior apartments within the same property. This makes it easy for residents to shift from one section to another as their needs change.Co-housing – There are two types of co-housing; general co-housing and senior-only co-housing. In each case, residents own their homes but share common areas like community buildings and yards. Quite often, co-housing works a lot like a homeowners association. You can see a list of communities on the Co-housing Association of the United States website.To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.Where to Invest in Senior Housing in 2020If you are looking for a senior housing investment, you might be wondering which cities would be ideal. U.S. News has come up with a list of the best places to retire in 2020 based on factors such as house affordability, retiree taxes, happiness, and access to quality health care.Here are some of the best cities for a senior housing investment accompanied by Mashvisor’s rental data to give you a general idea of how long-term rental properties perform in each real estate market:Tampa, FloridaMedian property price: $420,114Price per square foot: $212Traditional rental income: $1,831Traditional cash on cash return: 1.8%San Diego, CaliforniaMedian property price: $804,753Price per square foot: $522Traditional rental income: $2,623Traditional cash on cash return: 1.2%Orlando, FloridaMedian property price: $335,973Price per square foot: $180Traditional rental income: $1,705Traditional cash on cash return: 1.8%Chattanooga, TennesseeMedian property price: $325,625Price per square foot: $168Traditional rental income: $1,512Traditional cash on cash return: 2.2%Fort Wayne, IndianaMedian property price: $239,918Price per square foot: $111Traditional rental income: $1,261Traditional cash on cash return: 2.1%Lakeland, FloridaMedian property price: $309,687Price per square foot: $147Traditional rental income: $1,435Traditional cash on cash return: 1.8%Knoxville, TennesseeMedian property price: $338,511Price per square foot: $146Traditional rental income: $1,267Traditional cash on cash return: 1.4%To learn more about how we will help you make faster and smarter real estate investment decisions, click here.Grand Rapids, MichiganMedian property price: $298,937Price per square foot: $159Traditional rental income: $1,296Traditional cash on cash return: 1.4%Sarasota, FloridaMedian property price: $589,389Price per square foot: $288Traditional rental income: $2,148Traditional cash on cash return: 1.5%Bottom LineWhether you are a beginner real estate investor or a veteran that wants to diversify their portfolio, you cannot go wrong with a senior housing investment. As Baby Boomers age, there will always be demand for senior homes. Senior housing is a low-risk investment that guarantees you high returns.Related: Buy Rental Property in the 5 Best Places to Retire Start Your Investment Property Search! START FREE TRIAL Chattanooga TNGrand Rapids MIOrlando FLSan Diego CASenior HousingTampa FL 0FacebookTwitterGoogle +PinterestLinkedin Charles MburuguCharles Mburugu is a HubSpot-certified content writer/marketer for B2B, B2C and SaaS companies. He loves writing on topics that help real estate investors and agents make better choices. Previous Post Miami Real Estate Market 2020: Traditional vs Airbnb Investments Next Post Dallas Housing Market: Top Investing Location in 2020 Related Posts What Are Corporate Rentals and Should You Invest in Them? How to Invest in Single Family Homes: Follow These 5 Steps How Much Expense Goes Into a Luxury Rental Property? The Advantages and Disadvantages of Buying a Duplex House as an Investment Property When Are Multi Family Homes for Rent the Best Investment Property? Are Single Family Homes a Bad Real Estate Investment? What Is the Best Type of Miami Investment Property? Are Condos a Good Investment for 2021? Investing in Single Family Homes: Why It’s a Must Are Condos a Good Investment for 2020? Are Washington DC Apartments for Sale a Good Investment Opportunity? Condo vs Townhouse: Which Is the Better Real Estate Investment?