In case you missed it, silver exploded nearly five percent higher … in a single day … which takes its impressive year-to-date gain to nearly twenty percent.
Of course, we’re not into using precious metals as trading vehicles to churn out short-term dollar-denominated capital gains.
We think real investing is about acquiring streams of passive cash flow. Rental income is sustainable, resilient wealth that doesn’t gyrate up and down with every Presidential tweet or bloviation by a Federal Reserve governor.
Nonetheless, we do think silver and gold can serve a powerful purpose in a strategic real estate investor’s portfolio. In fact, we’ll probably make this our presentation topic at the upcoming New Orleans Investment Conference.
But there’s another big silver boom happening … and it’s one that’s attracting gobs of capital and produces very strong cash flows.
A recent research report from Jones Lang Lasalle (JLL) described healthcare as an “undeniable force in the U.S. economy” and “the largest employer in the U.S.”
JLL says the healthcare’s bright outlook is rooted in powerful demographics…
“Underlying the forecast for growth in healthcare spending are … the growing and aging U.S. population.”
It’s the “silver tsunami” our friend and residential assisted living investing expert, Gene Guarino, talks about all the time.
And by the numbers, it’s a sector likely to be growing for awhile …
“… the American population over 65 years of age is projected to almost double, from 50 million to nearly 95 million …”
“… the 95 and older population is expected to nearly triple, from 6.5 million to 19 million.”
Maybe that’s old news. (Sorry, was that a pun?)
But the point is … those demographics drive big expenditures …
“Healthcare spending is expected to grow by more than nearly $2 trillion in the next decade.”
Of course, just because big money is flowing into a mega-sector, you still need to figure out how to stake your claim and get into the cash flow.
On this count, the report contains some valuable insights …
“Healthcare delivery continues to evolve toward a more decentralized model away from inpatient care and hospitals.”
Why? Because that’s what the customer WANTS …
“Healthcare consumers increasingly expect … a better experience when seeking care.”
“This trend is leading to new real estate strategies that include moving to … smaller-scale … centers.”
Of course, they’re not talking about residential assisted living homes. At least not yet.
But McMansions converted into a cash-flowing group home provides both care and community to a growing demographic … and fit well into the micro-trend.
We’re guessing big players like JLL and their institutional clients just aren’t interested in owning a dozen single-family homes each cranking out $10,000 a month of net spendable cash.
That’s because as great as this sounds to Mom and Pop investors and syndicators on Main Street, it’s small potatoes to big institutional players.
Yet we think it’s probable somewhere down the line that the big players will find a way to get in on the action … the same way huge private equity funds found their way into single-family homes.
But that day isn’t here yet. This means there’s still a lot of room for Main Street investors and syndicators to get in on the action.
And unlike many industries which can be offshored, tariffed, or cut out of the family budget in tough times … healthcare is an industry that will remain local and likely to enjoy continued public, corporate, and political support.
Residential assisted living is one of our favorite niches. We’re seeing many individual investors and syndicators having success in this space.
The demographics driving this sector are powerful and undeniable.
As baby-boomers have moved through the seasons of life, they’ve created huge economic bonanzas for industries which find ways to serve them.
Healthcare could end up being the biggest baby-boomer bonanza of them all.
So whether it’s medical office, residential assisted living, or some other healthcare related real estate play …
… this is one silver boom tailor made for strategic real estate investors and syndicators.
Until next time … good investing!
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