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Updated about 4 years ago on . Most recent reply
Residential Care Home
I'm just curious, does anyone have experience with Residential Care Homes? I saw one advertised that was a house set up for six people, fully occupied. They claimed it was 10.5% CAP. I'm just wondering, is this akin to a nursing home or is it just a house set up for the elderly. Does anyone know how these work and if they're a good passive investment?
Most Popular Reply
Carehomes are the future. High ROIs to be had while serving the elderly. The Baby boomers are of age and are the largest population currently. They are going to need a place to stay and be cared for.
The official name is different for each state or county. But generally, its up to 6 residents and must have 2 staff 24/7. They provide basic care needs for the residents, like bathing, medications, meals, and sometimes outings and transportation to medical appointments.
Carehome staff to resident ratio is 2:6 vs assisting living facilities 1:10+. Carehomes overall provide better care and attention to residents because of this. And residents are not isolated in separate apartments but in a private home with bedrooms. So its also home environment vs. an institution or hotel/apartment.
A carehome operator administrator must be licensed by the local governing agency. To maintain the license requires passing inspections, and continuing education.
As investors, you can choose to simply lease a home that's been made wheelchair accessible. This may be as simple as ensuring hallways and doorways are wide enough (usually a 32" is sufficient), wheelchair ramps 12" for every 1" of rise; example 6" stair rise=6' ramp), and safe accessible bathrooms (walk in showers are best but not usually required). ADA requirements can be used to set up your house though not required as ADA does not apply to private residences. Leasing the home is passive investment.
You can choose to become involved in the daily operations for greater ROI but now that's the business part of the carehome. You would need to be a licensed administrator. Now you'd be an active investor, much more stress of course as running a carehome is quite involved dealing the licensing, complaints, inspections, residents, families, and medical liabilities.
Either way, the ROI is much greater than the traditional rental.