The Evolution of Assisted Living

By Kevin Haught

Let’s talk about the history and evolution of assisted living.

In today’s day and age people are living much longer than they ever have in the past. Data suggests that prior to a pre-modern world, life expectancy was approximately 30 to 40 years. In the early 19th Century life expectancy starting to increase due to countries becoming more industrialized and medical advances. Since 1900 the global life expectancy has almost doubled. In 2016 The average lifespan in the United States was just over 78 years.

Along with an increase in life expectancy, there has been an increase in the number of years that people live with some sort of disability and in the United States, that is about 11 years. This is important in the arena of assisted living since many people prior to the medical advances were treated like there was something wrong with them when they reached older ages and they were placed in “mental” institutions.

Eventually there came a realization that this segment of the population was not mentally ill, but they were simply getting older and were not able to take care of themselves any longer and needed assistance with activities of daily living. These could be things that we take for granted every day such as bathing, getting dressed, eating or just moving from one room to another.

According to the Pew Research Center, as of December 2010 Baby Boomers numbered 79 million and account for 26% of the U.S. population. Beginning in January 2011, the report estimates that about 10,000 boomers will be turning 65 every day for the next 19 years. Research also shows that approximately 4,000 seniors are turning 85 every day. This totals nearly 1.5 million new 85+ elderly each year and over 5 million in need of accommodations in the US alone.

So, what were the options to help with these activities? A family member can stay home and help with these activities or place their loved one in what used to be called a nursing home, which is a medical facility, or they could hire an in-home caretaker which has an average cost of $23 per hour. An AARP survey showed that 90% of all seniors would rather live in their own home throughout the rest of their life. Estimates say 70% of seniors will need daily care for an average of 3.5 years.

Now we have assisted living and there are essentially two options. There is the “big box” facility which feels more like a nursing home and there is residential assisted living. At the Residential Assisted Living Academy, we inspire, guide, and teach entrepreneurs how to become owner/operators of assisted living homes. Focusing on the resident and their family first. A friend once said to me “what you do is changing the perception of assisted living, where hugs and kisses do NOT pass through the accounting department”.

What does this mean for the investor? Everything! There are thousands of new and seasoned investors looking for that next, or maybe first, investment. What do you desire with your investment money? Most investors concur that they want security, safety, and significant cash flow. More and more are looking to have some social and/or environmental impact alongside a financial return. Like Jim Rohn said, “Don’t just let your business or your job make something for you, let it make something of you”.

However, one of the biggest challenges facing investors is the ability to find quality deals. A big part of this challenge seems to be stemming from the fear of a major market correction. Throughout my travels I have had conversations with investors and their representatives about this fear, and where can they put their investment dollars or if they should “park” their money on the sidelines.

In comes Family Legacy Homes (FLH). Family Legacy Homes was created by Gene Guarino, the visionary behind The Residential Assisted Living Academy (RALA). The academy is America’s leading educational training and consulting organization for investors and entrepreneurs wanting to own and operate senior care assisted living homes. With more than 600 graduates annually from the academy, Gene has formed a national network of potential quality deals. With options to go direct to the owner/operators or to participate in a private equity fund (under construction), investors can diversify their passive investment portfolios in a growing market over the next quarter century.

According to PWC (PricewaterhouseCoopers) Emerging Trends in Real Estate 2019 report:

Investment in senior housing provides diversification because the sector is not as cyclical as other property types and was shown to be recession-resilient during the global financial crisis. Its “needs-based” demand characteristics allowed assisted living to withstand many of the downwind recession pressures faced by other commercial real estate sectors. The same report also stated: Investors who have partnered with solid operators located in strong markets are seeing outsized investment returns today. And for those who are not yet seeing these returns, they can perhaps draw comfort from the prospects of the demographics coming.

We, as the children of these Boomers, have the responsibility to give them the absolute best. The ‘Silver Tsunami’ is coming and Family Legacy Homes is ready to help you with your investment needs by Doing Good AND Doing Well.

About the Author

Kevin Haught joined Family Legacy Homes in February 2019 as Director and is responsible for developing and executing a long-term investment strategy alongside founder, Gene Guarino. Before joining FLH, Kevin worked in the financial services industry for over 10 years in various Anti-Money Laundering and Compliance roles.

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