Things to Know About Investing in Healthcare Facilities
Things to Know About Investing in Healthcare Facilities
You may be leaning toward healthcare facilities when presented with various real estate investment opportunities. And why wouldn’t you be tempted? There is a lot to recommend for this particular investment path. However, making the final decision without understanding things sufficiently well is still not wise. To help with this, here is a guide on things to know about investing in healthcare facilities!
Invest in healthcare facilities for a stable investment
The first thing you need to know about investing in healthcare facilities is that it is, as such things go, a relatively stable investment. Healthcare is and always will be widely required by pretty much everyone. This means that you are unlikely to be struggling with demand. At the same time, investing in healthcare facilities, in particular, is much smarter than investing in other aspects of healthcare. Developing pharmaceuticals is a risky long-term investment that can end in anything, starting from failure and ending in lawsuits if your product is harmful. The same applies to biotech, medical equipment, and every possible healthcare investment venue. On the other hand, medical facility investment is simple, easy, and profitable. There is no reason for you to complicate your life on purpose when this is just a real estate investment with a few extra steps!
Know what you want to use the facilities for
One of the most severe commercial real estate investing mistakes is just going into the venture with no idea of what you want to use the properties for. Investing in real estate when planning to open a dormitory is vastly different from investing in a property you want to rent to a family. And then, there are even more differences when investing in office space or a warehouse. If you don’t know what you want to invest in, just buying up random properties will not end well. Don’t think you can say you want a healthcare facility investment and call it a day. The problem is: what sort of healthcare facility do you want? A rehabilitation center? A hospital? What about a dentist’s clinic? Or perhaps a lab? You need to settle on one, so you can find the space that would work best.
Location is absolutely crucial
Just like in regular real estate, investing in healthcare facilities is all about finding the ideal property in a perfect location. You might think that people would be inclined to travel to a hospital or a dentist’s office no matter where they’re located. And you’d be somewhat correct, at least if they had no alternative. And that’s the thing: you will still have competitors. If a person has to commute a long way to reach you, they might just decide to look up all their options and find one with better reviews, even if it’s a bit more out of the way. Then, there are the needs of the facility to keep in mind. Choosing the right location for an addiction treatment center will be very different from picking the perfect location for a hospital, for example.
Be careful with the requirements
Note that when investing in healthcare facilities, there are some legal or technical requirements that need to be fulfilled. Namely:
- The property needs to have enough bathrooms.
- Some medical equipment needs to be located in rooms with lead lining or on-grade locations due to radiation.
- Medical gas storage areas need to be located in the center of the property.
- There is a minimal number of parking spaces required depending on the facility’s size. There must also be a sufficient number of parking spaces for people with disabilities.
- The property needs to be easily accessible to people with various types of disabilities.
- Corridors need to be at least six feet wide and the ceiling nine feet tall in some healthcare facilities such as hospitals.
Note, too, that these are only some of the more common requirements. More specialized healthcare facilities would have plenty of their own unique needs.
Know what you’re doing
The experts from Consumer Opinion advise that people involved in investment should be very up-to-date with legal requirements and procedures. If you are not, you risk very easily running afoul of the law, especially in an investment field as important and strict as healthcare. Just because you only provide space for their jobs to take place does not mean your responsibility is much lower. This is why it is important that, if you do not have all the necessary knowledge yourself, you hire a good advisory team. You can, of course, also consider alternative means of investment, such as a private equity real estate fund, real estate syndication investment, or even investing through crowdfunding platforms. All these options would take most of the responsibility away from you and allow you to invest passively. Naturally, it does mean giving up a lot of direct control.
Know there are still risks and drawbacks
Finally, understand that even though investing in healthcare facilities is safer than most alternatives, there are still risks and drawbacks. Even if you work with a commercial real estate investment expert, these are still present. Your chosen property could be less popular than you had expected. Or problems with maintenance and safety concerns might pop up. Continued upkeep of the building is, and always will be, an expense to account for, too. And there are tons of other little problems and things to keep in mind which could get in the way of your business. Ultimately, any form of investment is a risk. So, you need to prepare yourself thoroughly for the challenges ahead if you want to be successful. Not to mention finding good, expert support!
Now that you are more familiar with things to know about investing in healthcare facilities, you can decide whether or not this is the perfect choice for you. Obviously, there are a lot of benefits, but a few drawbacks to this type of investment, too. For one, you cannot really be as casual as you can be with some other real estate investments. However, the payoff would definitely be worth your effort!