Investing in Senior Housing: A Primer

A recent “Emerging Trends in Real Estate 2019” report named senior housing and care one of the top areas for investment. These sector includes independent living units, assisted living facilities, nursing homes and long-term care facilities. So what is fueling the power of investor interest in this niche?

The power of the aging Baby Boomers

The Baby Boomers are individuals born between 1946 and 1964 and are the largest age demographic in the United States. The number of Americans aged 65 or older will hit 79.2 million people by 2035 – a massive shift that will outstrip all current levels of supply. There will be 10.2 million people aged 83 or more by 2025. So the first reason that investors are waking up to senior housing investing is simply the biological clock of the largest segment of the U.S. population.

Aging inventory

A recent study found that 58% of all senior housing properties are at least 17 years old and 32% is older than 25 years. As a result, a huge number of senior housing inventory is obsolete regarding modern design and consumer tastes. There may also be new regulations to address with regards to existing, older housing. This has created two distinct opportunities:

Buying older units and bringing them back to life. This is a simple business model, revolving around the concept of taking older senior housing stock and fully modernizing it. The profit comes from buying older units cheap and then bringing them back to life at higher rents.

Building new units that better suit modern tastes and floorplans. With so much older inventory in the mix, there’s definitely opportunity to build new properties that meet the modern lifestyle demands – and technology – from scratch.


Senior housing is a unique niche because it is not fully subject to the ups and downs of the national economy. Whereas a boat marina can be negatively impacted by loss of jobs, senior housing care is a permanent demand and one that you can’t cut back on (much like healthcare itself). As a result, this sector is known to perform well even in times of recession or depression – you simply have to continue offering senior care and paying for it regardless of where the nation’s economy is heading at that moment.

Track record

Senior housing is not a new concept. It’s not a startup like AirBnB nor is it based on some new concept that now has to withstand the pressure of competition (the imitators). It has been around for decades and the track record is well proven. This gives investors an extra bit of security in that there should be no sudden impact that is unexpected. The advent of the internet, for example, which has created disaster for the retail and lodging sectors has no impact on senior housing except for greater ease in marketing.


The senior housing niche is well-positioned for the megatrends in U.S. population and is highly recession-resistant. There are opportunities in both new construction as well as remodeling of older stock. It has a long track record of success and that’s spurring renewed interest.

By Frank Rolfe

Frank Rolfe has been a commercial real estate investor for almost three decades, and currently holds nearly $1 billion of properties in 25 states. His books and courses on commercial property acquisitions and management are among the top-selling in the industry.