3 Ways to Make Money with Residential Assisted Living Investments

The following was written by guest blogger Gene Guarino.

The Baby Boomers are here and there are more on the way. The population of seniors age 85 and older is the fastest growing demographic in the country today.

It is expected to increase by 300 percent over the next 20 years. That is a huge problem and an even bigger opportunity.

Here are the facts about our aging population:

• Four thousand people are turning 85 every day.
• Seventy percent of them are going to need help for an average of three and a half years, 24 hours a day.
• Most people are probably not going to be the one to take care of Mom and Dad on their own.

They are going to have to bring somebody into their home to provide that care or they are going to have to move them to an assisted living facility.

3 Methods for Investing in Residential Assisted Living Homes (RAL):

Own the real estate and lease it to the operator of the RAL business.

Two risks associated with single-family home rentals are misbehaving tenants and smaller returns. Bad tenants can add a lot of wear and tear on a property; everything from broken windows to dissecting their motorcycle in the family room.

Typically a lease term is one year. After one year, the misbehaving tenant moves out and your property may be empty for a month while you are repairing the damage.

With a RAL operator, they will want a long term lease of five years or more. That’s a long term low impact tenant, who may be willing to pay a higher rent. Up to twice the “regular” rent because of the income they will generate. Now you have stable, well behaved tenants and a higher return.