What are the pros and cons of owning an assisted living facility?
Direct answer
The main pros are steady demand from an aging population, mostly private-pay revenue and NOI margins that typically run 15% to 30% for well-run communities. The main cons are that it's an operating business with heavy staffing costs, regulatory oversight and income that swings with occupancy.
What to know
Pros: demand rising as the oldest baby boomers turn 80, existing communities priced below replacement cost, and value that grows about $12 to $17 for every $1 of added NOI.
Cons: staffing typically consumes 50% to 70% of operating expenses, surveys and licensing add risk, and buildings need ongoing capital.
A middle path is owning the real estate and leasing it to an operator, which trades operating upside for steadier rent.
How Haven helps
Haven helps owners and investors weigh these trade-offs before they buy or sell. Read our senior housing market outlook.