Medical Real Estate

Different Investment Opportunities in Medical Real Estate

While both commercial and residential real estate markets all over the United States have shown massive progress and improvements over the last few years, one type of real estate stands out. Since the enactment of the Affordable Care Act, more people in the US have health insurance than ever before, which means that more patients are seeking primary and specialist care than in years past.

As a result, there’s a much higher demand for medical offices and facilities than in years past. However, medical real estate does not simply represent a single opportunity for investors. In fact, if you are interested in capitalizing on one of the fastest growing and most lucrative sectors in real estate, you have a few different options open to you.

Medical REITs

Most medical and healthcare facilities and offices are large enough investments that individual investors cannot afford them on their own. However, they make brilliant investment opportunities for investors who pool their capital. Thus, more and more REITs (real estate investment trusts) are focusing on medical and healthcare properties.

Depending on your area and the type of investment you want to make, you may want to look into different types of REITs in your area. Some focus specifically on primary care and urgent care facilities, while others focus on building and developing hospitals. Still others focus on senior care and senior communities. Consider the demographics of your community and whether or not your area would be a good hub for a large hospital, more primary care offices, or senior centers. Then you can determine which of these types of REITs will be the most advantageous for you.

Crowdfunded Medical Real Estate

Of course, you don’t have to invest in an REIT. Instead, if you are an accredited investor, you can join a real estate crowdfunding site and look into investing in specific medical real estate developments. When you go this route, you will need to do your own research and determine whether or not a proposed project for funding is likely to succeed or not.

Crowdfunded medical real estate has the advantage that you can choose to invest as much or as little in any one project as you like. It also allows you complete control over which properties you invest in, which is a luxury you won’t get when you invest in an REIT.

However, you should be aware that there are some disadvantages that come with real estate crowdfunding, as well. For example, real estate crowdfunding is still a very new style of enterprise. As of now, most established and highly successful developers have the connections and means to get funding for their projects without resorting to crowdfunding.

Thus, when you pledge funds to back a project, you will likely have to assess the level of risk associated with the developer behind the project. Look into their previous projects and see what kind of track record they have with medical real estate. This style of funding is gaining more traction, and some larger developers are moving toward at least partially funding their medical real estate projects with crowdfunding sites.

Basically, when deciding to go with an REIT or real estate crowdfunding, you’ll have to identify and assess your risk levels. Does your REIT have an acceptable track record with funding profitable developments? Are you comfortable with putting your investment capital in their hands in exchange for stock in the trust? On the other hand, do you trust your own research to make the best decisions on crowdfunded real estate projects? Does the ability to invest in multiple properties of your choosing outweigh the risks of backing potentially untested developers?

With so many different investment opportunities in medical real estate, the major question for most investors is which style of investing to choose. Whether you go with a healthcare REIT or crowdfunded medical real estate, you have the opportunity to see significant returns on your investment in relatively little time, thanks to the ongoing high demand for medical properties in the US.