Why do special rules apply to the transaction of healthcare properties and why is a lot of market knowledge required?
In daily valuation practice, the transaction of healthcare properties requires a differentiated methodology and knowledge of market data, risk potential and legislative framework conditions. After all, healthcare properties are also always management properties.
The following parameters must be taken into account:
- Care homes can only be converted to a very limited extent.
- Legally regulated investment follow-up costs limit the amount of nursing home rents.
- New regulations in the state nursing home laws, such as the single room quota, must be implemented, leading to a reduction in the number of care places and thus to declining revenues for the operator.
- In the event of an operator insolvency, there is a risk of loss of rent.
But how can all parameters be correctly weighted, how can the market value of a healthcare property be reliably determined? TERRANUS offers both expertise as a healthcare real estate agent and experience as an operator.
If investors don’t want to be stumbling around in the dark and want to know exactly what the respective care property is worth on the market, there is no way around a complex analysis. This includes the evaluation of tens of thousands of data, as guaranteed by the TERRANUS analysis tools. The interpretation of this broad factual evaluation then enables a reliable valuation and thus a safe investment decision.
Whether the location and operator concept fit together and are suitable for a successful investment depends on many different factors. With its various database analysis tools, TERRANUS checks the parameters that are important for your investment. We carry out SWOT (strengths, weaknesses, opportunities, threats) analyses, evaluate the market and filter out the true values of a healthcare property for you. In addition, we find the assets of value for you, uncover weak points at an early stage and adapt the process.
According to the Federal Statistical Office, there will be around 24 million people over the age of 65 in Germany in 2040. This development calls for visionary entrepreneurs and investors. For example, it is important to include future digitisation in the realisation of new living concepts and residential care facilities as well as in service and care structures – from smart homes and potential assistance systems to autonomous driving services and “accompanying” robots.
If a healthcare property gets into difficulties, the problems of the operator are or become problems of the owner as well. In order to recognise warning signals at an early stage, TERRANUS recommends active monitoring as part of asset management. We observe the development of your investment and in parallel all relevant market and competitive parameters in order to be able to quickly counteract subtle or under-the-radar developments. 5 tips for owners:
- If a rent or lease payment is not received, owners should immediately seek dialogue. We will then find a suitable operator for you or step in as interim manager at short notice.
- Keep an eye on the occupancy rate. The national average is 91 per cent.
- The management of a nursing home is always a local business.
- Ask: How are the residents, how are the staff members? The information gets around and determines the future success of your real estate investment.
- Implement maintenance work quickly so that your care property does not lose its appeal.