With the Covid-19 epidemic, small-home elder living has gone from a niche offering to a hot topic. A lot has changed with single-family small homes and high-rises.
Small-home senior living now covers anything from single-family homes to high-rises with small-home sections on numerous floors. The future of senior living will undoubtedly involve more intergenerational models, additional investor interest, and maybe some “big-box” senior housing providers. Not to mention anti-ageism philosophy and its accompanying selling power.
Siobhan Farvardin, senior designer and partner at HKS, and Chuck Bongiovanni, CEO, and co-founder of Majestic Residences, agree. Bongiovanni founded and led CarePatrol.
In recent years, investors and owners have focused on billion-dollar multi-community portfolios rather than small-home senior living communities. Yet, despite the threat of a pandemic, there is evidence that interest in small-home elder living is growing. This growth is among investors and prospective residents — and it is more sustainable, financially.
Small-Home Senior Living Might Change
When you run tiny homes correctly, they may generate profit margins comparable to more extensive typical senior care facilities. These towns also have more excellent staffing ratios than big-box housing.
Why should I purchase a property and rent it out for $400 per month when I can develop a company out of it? As many financial markets have found, it has been a tough couple of years all the way around. Many seniors were paying between $10,000 and $15,000 per month for senior living. That is an impossible amount for most seniors today — making senior housing a hot topic.
What is the model for senior living?
What sets small-home elder living apart from other options is its size. A small-home community contains fewer apartments than a typical independent or assisted living complex.
Majestic Residences is a franchise-based company. A spokesperson says franchisees may expect to spend between $120,000 and $860,000 to lease and convert a small-home neighborhood. Farvardin estimates that one-story small-home community projects cost roughly $170 per square foot. However, a more vertical variant costs between $180 and $300 per square foot.
Profit margins on small-home communities vary, but Bongiovanni claims Majestic Residences franchisees may get 24-33% profits. Another distinction is how modest houses fared compared to the rest of the sector regarding illnesses and mortality.
Healthier living for seniors
In early 2021 research found fewer COVID-19 cases and fatalities at Green House and other small-home eldercare communities. This comparison was to standard nursing facilities by summer 2020. Furthermore, this was before the Covid-19 vaccine or the delta version came out. Yet Bongiovanni and Farvardin think this product type has helped prevent the spread of Covid-19 among residents and employees.
Let’s consider residents at CC Young, a Dallas-based continuing care retirement complex. They may enjoy assisted living, memory assistance, skilled nursing, adult daycare, and other services. There are modest house-style layouts with up to 16 residents per community on some levels.
Living the dream
The project began years before the epidemic, and Covid-19 will test it in 2020. Farvardin said CC Young could employ the small-house concept to more simply and efficiently safeguard inhabitants during the epidemic.
Farvardin remarked at BUILD that the significant difference between a big box and a small box is the number of inhabitants living together.
According to Bongiovanni, Majestic’s initial five residences debuted during the early days of the Covid-19 outbreak, but they were all sold out within eight weeks. He attributes it to how Majestic Residences’ franchise houses function. With one caregiver per four or five residents and technology tailored to their requirements, that is to say.
Covid has boosted demand, he said. And relatives view these communities as more controlled.
Tiny houses may also thrive in staffing. According to Bongiovanni, the Majestic Residences model’s reduced workforce has resulted in stronger interactions with residents and tighter community culture.
The caregivers get to know the people a lot better, he continued. It’s because they get to know the other carers and don’t want to let them down.
Surrounding a quarter of Majestic homes are carers. Majestic Residences caregivers make between $12 and $18.50 an hour. A school in the Dominican Republic is being converted into a 20-bed small-home community by Majestic Residences. The franchise concept and the power of branding are driving rapid growth, Bongiovanni added.
Evolving senior mini-homes
Despite the pandemic’s uncertainty, Bongiovanni and Farvardin predict a bright future for small-home elderly living.
Farvardin predicts that more small-home communities will be multi-generational. Current multifamily and commercial real estate developments may serve as a model for senior housing firms to break the pattern. “These are becoming increasingly complex and diversified in mixed-use situations,” says Farvardin. “That’s only the tip of the iceberg,” Farvardin added, “of what the sector can achieve in the years to come.”
It would be great to accomplish these small-home communities in a larger mixed-use area. Farvardin believes tiny houses might help seniors construct more sustainably. How can we make these structures last ten years? A smaller family dwelling allows you to demolish and rebuild one wing rapidly.
The small-home concept is also advancing within the technology sector.
Majestic Residences now uses a technology package that includes robotic pets, incontinence sensors, and virtual reality headsets.
Bongiovanni predicts that a big-box senior housing operator would eventually join the small-home market, as many target younger elders.
A 70-75-year-old does not want to be living with an 86 year old. It’s almost as if the big-box housing will develop smaller houses to care for folks that are healthy both physically and mentally.
As many look to investing power and looking for places to build wealth — big-box housing may be the wave of the future in 2022.