As you look ahead to retirement, you may be thinking about not just where you’ll live but also how to best position your finances. One option worth considering is investing in a retirement community property through a capital group company. According to IBISWorld, as of 2023, in the U.S., there are 18,810 retirement communities in business. There are several reasons why this type of real estate can be attractive.
1. Competitive Returns
Retirement communities and other senior housing options are a growing market fueled by an aging population. As demand increases faster than supply, returns have tended to equal or exceed other real estate investments, according to a capital group company analysis. While past performance doesn’t guarantee future results, trends appear likely to provide profits. Money from property sales or leases is distributed to investors. Property values often rise over time as well, based on demand trends. So, revenue from leases paired with potential appreciation is an attractive combo that can help keep returns competitive.
2. Diversification
Any financial advisor will stress the importance of diversification for managing risk across a portfolio of assets. Real estate is already considered an alternative investment that spreads risk versus owning only stocks and bonds. Owning property through a capital group company means you’re invested in a variety of retirement community properties and geographies, which further increases diversification. Spreading money across numerous properties can help manage the risks of any individual investment or location underperforming.
3. Rent Stability
Senior housing tends to attract long-term residents and produce relatively stable sources of rent. This makes cash flow more predictable for investors and programs like a capital group company. Compare that to a general rental property, which may experience more turnover and vacancy. Of course, economic fluctuations or regional issues can still impact occupancy or sales in retirement communities as they would any property. However, demographic trends in the target market are a healthy underlying driver for demand, supporting reliable and steady income streams.
Gold Stream LLC offers portfolios of professionally run retirement community properties aimed at producing attractive returns paired with diversification and cash flow stability. As you look ahead to reposition assets before your retirement, consider how alternatives like senior housing investments might fit into your overall plan. If you’re ready to invest in retirement communities, reach out to Gold Stream LLC to get started.
