Investing in a senior housing project means choosing a place where older adults can live comfortably and happily. It’s important to look for amenities like easy access to medical care and fun activities. Also, having stores and pharmacies nearby is convenient. The building should be safe and easy to get around in, with features that make everyone feel secure. When you invest in senior housing, you’re picking a place where seniors can enjoy life to the fullest, just like SC Krishnan, who found joy in his senior living home at Serene Urbana in Bengaluru.
See also: Things to consider before investing in a senior home
Types of senior housing communities
55 plus communities
These communities are designed for people who are at least 55 years old. They offer activities and services that older adults enjoy. For example, they might have clubs, fitness centres, and social events just for seniors.
Luxury senior living
Luxury senior living is like living in a fancy resort. It’s for older people who want the best amenities and services, like gourmet meals, spas, and chauffeur services.
Independent living
In independent living communities, seniors can live on their own in apartments or houses. They have the freedom to do what they want, like cooking, but can also join activities and get help if needed.
Assisted living
Assisted living is for seniors who need some help with daily tasks like cooking or taking medication. They live in their own apartments but have staff to assist them when needed.
Memory care
Memory care communities are for seniors with memory issues, like Alzheimer’s disease. They provide specialised care and a safe environment tailored to their needs.
Skilled nursing care
Skilled nursing facilities offer around-the-clock medical care. They are for seniors with serious health problems who need constant supervision and medical attention.
Continuing care retirement communities (CCRCs)
CCRCs offer different levels of care in one place. Seniors can start in independent living and move to assisted living or skilled nursing care as their needs change. It allows them to stay in one community even if their health declines.
Evaluating staff quality
Observing interaction
Watch how staff members treat residents. Do they speak kindly and patiently? Are they attentive to residents’ needs and do they call them by name? For example, you might observe a caregiver helping a resident with mobility or a nurse checking in on medications.
Asking questions
Ask about the staff’s qualifications, training, and certifications. For instance, inquire about whether caregivers have specific training in senior care. Also, ask how long staff members typically stay in their jobs to understand turnover rates and job satisfaction.
Staff-to-resident ratio
Learn about the number of staff available compared to the number of residents, especially during different times of the day and night. A lower ratio often means more individual attention for each resident. For example, ask how many caregivers are on duty during meal times or overnight.
Reviews and recommendations
Read reviews online and talk to current or past residents and their families. They can share their experiences and opinions about how staff members interact with residents. This feedback can give you a good idea of the quality of care provided.
Quality assurance programs
Ask if the community has programs in place to ensure high-quality care, such as ongoing training for staff. Well-trained staff are usually more equipped to handle the needs of residents effectively.
Emergency response
Understand how staff members handle emergencies. For example, ask about their protocols for medical emergencies or unexpected situations. Knowing that staff are prepared and responsive can provide peace of mind.
Demographics
The senior population in India has been steadily increasing, with over 139 million people aged over 60 as of 2019, comprising more than 10% of the total population. This demographic is expected to nearly double by 2050, reaching approximately 319 million individuals, or nearly 20% of the population. This growth underscores the importance of understanding local demographics through census data or industry reports when assessing the need for senior living facilities and services in the area. It highlights the necessity for communities and policymakers to prepare and adapt to accommodate the evolving needs of seniors in the coming decades.
The market for senior homes in India
Understanding the senior housing market in India involves assessing the current number of senior living facilities and determining whether there is a need for more, such as independent living or assisted living options. However, gathering this information is challenging due to limited data availability, especially outside major cities, and the informal nature of many senior housing arrangements. Definitions of “senior living” can also vary widely, complicating efforts to gauge market saturation accurately.
To navigate these challenges, it’s essential to leverage real estate market research reports from organizations like Colliers or JLL, which often provide insights into supply and potential demand for senior housing. Engaging with industry associations such as the Assisted Living Federation of India (ALFI) can offer additional perspectives on existing facilities and growth trends. Local research involving discussions with real estate professionals, developers, and senior care providers is also crucial for understanding local dynamics and identifying opportunities for new developments.
Rather than solely focusing on existing facilities, attention should also be directed towards understanding demographic trends, such as the increasing population of seniors and socio-economic factors influencing demand. By considering these factors, stakeholders can better assess the necessity and type of senior housing needed in specific regions of India, ensuring that future developments meet the evolving needs of seniors and their families effectively.
Investment strategies in senior housing
When you’re thinking about investing in senior housing, there are a few different ways you can go about it. One way is to buy a senior home that’s already up and running. This means you start earning money right away from the seniors who live there. However, sometimes these places need renovations to make them more modern, which can cost extra money. Another option is to build a brand-new senior home. This lets you design everything from scratch, so it’s exactly what seniors need. It might bring in more money over time, but it requires a lot of upfront cash and takes a while to finish building.
You could also invest in a senior housing REIT, which involves buying shares in a company that owns lots of different senior homes. This spreads out your risk because your money isn’t all tied up in one place. It’s easier to buy and sell these shares, but you don’t have as much say in how each home is managed.
Lastly, you might consider turning an existing building into a senior home. This can be cheaper than buying one that’s already set up, but it comes with challenges like getting the right permissions and fixing any problems with the building. Each option has its good points and things to watch out for, so it’s important to think about how much money you have to invest, how much risk you’re comfortable with, and how involved you want to be in managing your investment.
Property evaluation
When evaluating an existing senior housing facility, you need to check several important things. First, look at the building’s physical condition, including the electrical systems, plumbing, roof, and how accessible it is for seniors. Look for signs of wear and tear, potential code violations, and any necessary repairs. Next, make sure the facility complies with all fire safety, health, and accessibility regulations for senior living. If it doesn’t, consider the costs of bringing it up to code.
Finally, evaluate whether the facility needs renovations to modernize amenities and improve accessibility. Think about the renovation costs and how these updates could impact occupancy rates and rental income. This thorough assessment will help you understand what you’re getting into and plan for any additional expenses.
Financial viability
When evaluating the financial viability of a senior housing facility, you need to look at several important things. First, review the historical financials by checking past data such as occupancy rates, rental income, expenses, and net operating income (NOI). This helps you spot trends and find areas that might need improvement. Next, estimate the operating costs, including property taxes, insurance, utilities, staffing, maintenance, and marketing expenses. This gives you a clear idea of the ongoing costs you’ll face.
Then, project the future income by forecasting rental income based on market research, current occupancy rates, and any planned rent increases. Finally, consider exit strategies like selling the property, refinancing, or passing it on. Evaluate potential sale values or refinancing terms to make sure you can get the best returns when you decide to exit the investment.
How much should you save for your retirement?
Finance and wealth managers say that it is wise to account for an inflation of 6% per annum. One should also know how much a senior living property may cost you. Cost of living will also vary, depending upon the lifestyle that you have. The price range of senior living projects as per market rates is given below.
| Cost of senior living projects | Rental value | Other charges | Costs that come up | Costs that you do not have to worry about |
| Rs 30-70 lakhs (approximate value of 1-3BHK units) | Rs 7,000 per month and onwards | Maintenance, GST | Hike in charges due to inflation, spending on clothes, medicines, food, travel, spending on dependent children | Children’s education if they are independent, fuel cost owing to job-related commute, formal clothing for office |
See also: Will the government’s model guidelines for retirement homes help senior citizens?
Inheritance of senior living properties
Senior living communities are designed specifically for retired people. Even though you can buy a unit at a younger age if you plan ahead, you can only live there once you reach the retirement age, typically 55. When a resident passes away, their property goes to their rightful heir, but the heir can only start living there when they turn 55. Rules can vary by community. Visiting children are usually allowed to stay with their parents for a limited time, often between 30 to 90 days per year if they stay overnight. If they only visit during the day and leave by night, there are usually no restrictions.
Old Age Home vs Senior Living
FAQ
Senior citizen-friendly projects are slightly more expensive than regular projects because a lot of care is put into such properties so that they are just right for the lifestyle of the elderly. Anti-skif tiles, dedicated staff, medical facility, concierge services etc make such properties expensive.
Yes, legal heirs can inherit such a property.
Old age homes are mostly provided aid by authorities or run by charity and trusts. Senior citizen projects are well-maintained and cater to the educated class of people who can spend enough to buy such a property.
Yes, depending upon developer to developer, such projects for sale are usually inhabited by the retired community, that is age 58 and above. Why are senior citizen homes so expensive?
Can my son inherit my property that is in a senior-citizen project?
What is the difference between old age homes and senior citizen projects?
Is there a defined age when a person can live in a senior citizen project?