Sue Bennett of www.bennettrealty.co.nz gives her top ten tips to people looking at rest homes or aged care facilities for sale. Sue is one of new Zealand’s top real estate agents specialising in the sale or rest homes and aged residential care facilities. She has sold over $200m worth of aged care and retirement village investment.
Sue’s top ten list is a good check list for anyone looking at investing in the aged care sector.
- First of all ask yourself is owning a rest home the right investment for you. While owning a retirement village or rest home facility can be very lucrative in the right hands you should only consider it if you are willing to commit to providing the highest standard of care to the residents.
- If you have experience working in the health sector you will be well aware of the challenges of caring for the elderly but it could well be that you will need to hire a person with good business skills to ensure the venture succeeds.
- On the other hand if you are a successful business person looking for an investment with a good return you will need to ensure that you have qualified and motivated health professionals to care for the residents.
- As part of your due diligence be sure to ask to see the latest Rest Home Certification and Audit Report. All rest homes and aged residential care facilities are regularly audited by the Ministry Of Health every 4 years and they also receive unannounced spot audits, called surveillance audits in between times. These audits can provide a good snapshot of any problem areas that have been identified and information on what has been done to remedy the problem.
- As with buying any business you will need to have the accounts for the past 3 years checked by an experienced professional to ensure that the business is profitable. This will also show how much has been spent on upkeep of the property.
- As part of the financial assessment you also need to find out what the occupancy rate for the facility has been. A good aged care facility should have a very high occupancy rate and ideally a waiting list although the nature of the business means that there will be a steady turnover of new residents as older ones pass away.
- One of the most important factors is the staff and their relationship with the residents. If possible arrange to talk to some of the staff and the residents as well as the manager. Find out if the staff have been paid the minimum wage or have they been well rewarded for their efforts.
- You also need to decided what size facility best suits your budget. Too small can mean the fixed costs eat up a lot of the profits but if it is a large property this may require considerable capital reserves to ensure the property is well maintained.
- For rest homes with severely disabled residents you will need to check that there are fully qualified nurses on the staff and whether they are employed full time or part time.
- Lastly be aware that owning a rest home is more than just providing good care and feeding the residents well. The residents also need to be stimulated with outings and social events as well as light exercise classes and other activities to keep them occupied. How well this is being done by the present owners is a good indication of the quality of the investment for sale.