As strange as it might seem, Retirement Homes are increasingly becoming a lucrative component of the real estate market in Toronto. The obvious reason behind this surge in demand is the increase in aging population. Real estate investors know that aging is inevitable; therefore, for them the lucrativeness of retirement homes will increase with the passage of time.
The reason why there is an inclination in the market pertaining to retirement homes as a commercial investment is the fact that compared to other elderly facilities like Private Hospitals, Nursing Homes and Old Age Homes, the retirement homes are mostly unregulated. Therefore, as per say, there aren’t any strict rules and regulations with retirement homes, so the entry into this commercial business is relatively easy.
Pertaining to investing in Retirement Homes, there are two ways of going about it. Either a commercial real estate investor in Toronto can build a new retirement home, or the investor can invest in some existing retirement home and share the benefits of it. No matter whichever approach an investor follows there are a few things which have to be considered prior to investment, so that the investment stays lucrative in the long run.
Sufficient space is the first thing that should be considered with regards to investment in retirement homes. These homes are for the elderly, hence the needs of old people like place for reading, a garden perhaps and a place to sunbath should be available in the facility, and if they are not available then there should be room for expansion. Moreover, in terms of the infrastructure of the building, the common area should be at a sufficient distance from the private area, allowing the elderly to keep their private calm at a distance from the noise of gathering.
The second important factor a real estate investor in Toronto needs to consider pertaining to investing in Retirement Homes is the age mix of the residents of the facility. If the average age of the retirement home in which the investor is putting money is 75, then after a decade it will be 85 and after that it will be 95. When a retirement home gets known for a particular age group, only the people of that age group join it. So, if the average age mix of the retirement home being invested in is 85 it leaves the elderly of 75 years old in the market out, causing the home to lose a fair share. Ergo, before investing in a retirement home in Toronto, an investor needs to make sure that the age mix of the residents of the home is as low as possible.
The solution to both the concerns associated with retirement homes is the room for extension. An investor needs to make sure that there is sufficient space available to fulfill the needs of the old people and sufficient room for new construction so that new residents could also join the facility bringing the age mix down to the minimum, hence adding to the lucrativeness of retirement homes investment.