Investor owners of senior housing and healthcare facility properties looking for their next investment might well best be served by looking at their own portfolios, according to one expert on the topic.
Brent Holman-Gomez, senior vice president for originations, operations and asset management at Cambridge Realty Capital Cos., said renovating and improving a property already owned might be more profitable for the owner than buying one.
He wrote in the company's PulsePoints blog that the above is true unless the target property is at 100% occupancy and at the market's highest rent level with a controlled expense ratio.
"Compared to a new business venture, operating improvements to your current facility are much more lucrative, as they generally cost much less, possess solid upside potential and are a reinvestment in your existing business that lowers your existing risk. More likely than not, focusing on a currently owned property will be more rewarding than taking on the unknown challenges of a new property," Holman-Gomez said.
He declared any improvement in a senior housing business' ability to produce a steady income would improve its value nearly tenfold when based on property valuations per dollar of income.
"Empty units are potential goldmines of profitability. Adding some new excitement and energy to the things that seem mundane about your business by re-training staff, marketing and making cosmetic improvements can be the map that leads you to the pot of gold," he said.
