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Things to Look for in Your Continuing Care Home

Thursday, November 01, 2018

Have you thought about what would happen if your retirement community had a financial wipeout? Though industry members in this world point out this is rare, there are cases in which retirement communities have had to raise their monthly fees or reduce services.

Things to look for when seeking a continuing care home: 

1) Rent increases- If you see any change above 3-3.5% a year, ask for an explanation. If fees have not changed, a community may be struggling to maintain its occupancy.

2) Debt rating- Ratings of AAA to BBB are considered investment grade and should bring a measure of comfort to potential residents.

3) Profitability- Make sure the potential home is generating enough cash to cover its expenses.

4) Capital improvements- Is the community spending enough money on its upkeep? Combine financial statement analysis with the way the community looks.

5) Residents' Role- How involved are the residents in making financial decisions? 

*Based off of the New York Times article, Continuing Care Homes Need a Financial Checkup by Peter Finch.