Senior Housing: What to watch out for

When it comes to senior housing, there are a few areas you might want concern yourself with to avoid any pitfalls. In fact, maybe the city itself (the city you are dealing with) does not believe there is enough senior housing in their area-maybe they are welcoming it.

The first thing you need to remember about senior housing is the government requirements that go along with senior housing. You can have it zoned and get your permits for senior housing, but you will also need the requirements for the American Disability Act (ADA). The ADA requires that you make sure the buildings are going to adhere to their specific requirements. You really need to think about the senior care issues that under typical residential scenarios you might not have to be quite as concerned with. Think about it, you will need to make sure that enough ramps will be available (to help with the ease of going up stairs) or elevators are installed (or there is a location to install if the need arrives) for second or third floor living.

The second thing you need to make sure of is the population. Most people don’t think about this, but you want make sure if you are going to look at senior housing that you have a fairly sizeable number of senior citizens living in the area you are planning to convert or build. Think about the demographics. Even think about the surrounding communities. You can turn any kind of hotel or office space (or solid building) into some kind of senior housing without a whole lot of renovation dollars than you could just as a straight-forward residential unit.

The third thing you need to concern yourself with is the question of selling, leasing or renting. Do you sell the individual units to the seniors or is it best to have them lease or rent?

There are a couple of different exit strategies just like there is the house business. You could actually come in and take a large building that has individual units like that and get your attorneys to draft some condo documents and run around and convert it into individual ownership condominiums. You could also take it and keep it as rental property, keeping it occupied and generating a substantial cash flow, and even sell it from there.

Essentially, what you are looking at is either a market value as X number of dollars per unit or X number of dollars per square foot as just standard residential property. You might be able to look at an after-developed value or after-repaired, and renovated value to convert it into senior housing, then you may be able to get in touch with some people, some of the brokers, or some of the people involved in senior housing in that neighborhood, and find out what kind of dollars per unit or dollars per square foot (or dollars per bed) that those are going for. Either way, success if yours!

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