healthcare-reits

What Are Healthcare Reits | Benefits of Investing in Healthcare Reits

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Real Estate Investment Trusts (REITs) are essential for the healthcare industry. Healthcare REITs operate medical facilities to provide the best healthcare possible to patients. Some  specialised facilities under medical REITs are hospitals, medical office buildings, and senior housing.

healthcare-reits

Healthcare REIT investments make investors money by leasing space to tenants. The lease requires the tenant to pay for maintenance, taxes, and insurance. Due to this, REITs make a considerable amount of rental money. However, some of the best healthcare REITs also operate their facilities and generate solid revenue from them. They hire a third-party manager to handle the daily operations.

In this article, we’ll discuss the benefits of Healthcare REITs and look at the top REITs you can invest in 2022.

What are the benefits of healthcare REITs?

There are quite a few benefits to investing in healthcare REITs. They are:

1. Rapidly ageing population

According to an appraisal, over the next 20 years, the percentage of people aged over 65 will be approximately 44%. The healthcare industry will only boom, and more healthcare facilities will be required over time.

2. Advanced care facilities for growing population

The pandemic has shown us that healthcare facilities must be prioritised. Elderly people were the worst hit during the pandemic. However, everyone requires healthcare options. People are more conscious about their health, and annual checkups are just a starting point. The need for senior home facilities and skilled nursing also increases when children cannot take care of their ageing family members. Hence, it is now a necessity and no longer a luxury.

3. Booming pharmaceutical industry

The pharmaceutical industry is booming. It has led to an increase in demand for life sciences. However, the amount of space for labs is minimal at the moment. Because of the low vacancy rates in this industry, landlords are evaluating the most urgently required demand and acting appropriately. This business has had a threefold increase in life science investment sales since the start of this year.

Top healthcare REITs to invest in 2022

REITs are booming where healthcare is concerned. These are the top healthcare REITs to invest in 2022.

1. Community Healthcare Trust

Community Healthcare Trust has a diverse portfolio of healthcare properties spanning tenants, region, healthcare facility type, and business categories. Acute inpatient behavioural facilities, physician clinics, behavioural health centres, specialised centres, inpatient rehabilitation facilities, long-term acute care hospitals, medical office buildings, and surgical centres and hospitals are all part of the company’s portfolio.

The company has paid its investor’s huge dividends with its diversified approach over the years. Currently, the dividend payout happens every quarter. Community Healthcare Trust’s business strategy involves acquiring properties at higher cap rates to avoid competitive bidding. The healthcare REIT is in a fantastic position to increase shareholder wealth in the future. It has a conservative balance sheet, which allows it to buy a varied range of healthcare facilities. Future transactions should provide extra cash flow to keep growing its dividend.

2. CareTrust REIT

The CareTrust healthcare REIT’s business involves acquiring and leasing senior housing facilities. It has plenty of skilled nursing facilities in its portfolio. Apart from that, CareTrust also owns assisted living facilities, campuses for skilled nursing, and senior living facilities. The company owns net lease properties. Out of the 194 properties in its portfolio, they operate only three facilities by themselves. Leasing has paid off over the years and has provided investors with a decent income. CareTrust is renowned for consistently being among the top performers over 1, 3, and 5-year periods. In addition to focusing on net lease assets, CareTrust’s investment strategy is a crucial driver of shareholder value generation. It spends around $200 million every year, concentrating on higher-cap-rate prospects. It acquires off-market and little-advertised assets by using its vast network of contacts in the industry.

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