How Payroll Tax Cuts Could Affect Senior Housing Investors

How Payroll Tax Cuts Could Affect Senior Housing Investors

How Payroll Tax Cuts Could Affect Senior Housing Investors

The effects of the payroll tax holiday could make their way to the senior housing and assisted living real estate market.


One of the major headlines right now is Trump’s payroll tax cut. The executive order trump signed is aimed at cutting or deferring payroll taxes. If you’ve ever received a W-2, you know that a portion of your paycheck goes to pay Social Security and Medicare. 

The little bit of extra money on a paycheck, or less self-employed taxes paid, might add a little to the bank account, but the payroll tax break could cause some trouble for senior housing and assisted living investors and operators. While facilities getting private pay might not feel an immediate impact from medicare tax cuts and social security tax cuts, other facilities that rely on SSI benefits from their residents or medicare reimbursements could see a steep cut in the amounts they receive. 

Why would this happen? Well, there has already been talks for the past few years about these payments being on the chopping block if medicare or social security get their funding cut. Even a payroll tax deferral could put enough strain on an already struggling system to reduce the amount of reimbursements or SSI benefits paid directly to providers. 

I don’t have to explain what these cuts could mean to these operators. Less income = bad. This would be bad at any time, but occupancy is already down across most facilities due to the pandemic. Less income + lower occupancy = really bad. 

The private pay investors and operators may be shrugging this off, or even thinking this may end up being good for them. However, this can spell trouble for these folks as well. 

Facilities that have historically relied heavily on SSI and medicare will have to start looking for more private pay residents. What’s one common way for companies to get a piece of a competitive market? It could either be free toasters or lower prices. In this case, it’s more likely to be lower prices. 

We’re not just talking about a few beds opening up with lower prices, we’re talking about thousands of beds in some markets. Even the smaller markets will have a new supply of hundreds of beds opening up. 

This doesn’t mean everyone is doomed. Private pay facilities that get a premium for a higher end property and a higher level of service aren’t usually working with price sensitive residents. The facilities dropping their bed rates will have to find ways to cut their costs, which will likely result in a less qualified staff, meal budget cuts, delays in maintenance, and less frequent property updates

Investment opportunities

I’m in the business of selling these types of facilities, and have been recommending a handful of healthcare REITs with these types of properties. So you know I’m going to point out the silver lining and the opportunity here. 

There has already been a lot of consolidation happening in this industry. Small operators have already been struggling, and many have already been absorbed by the larger players. Several agencies have already stopped awarding new contracts to new providers due to cuts in state funding in many areas.

As smaller facilities close, residents are being funneled into other existing facilities. This is making it harder and harder for new operators to come into the business and open new homes.

A lot of the providers that are relying heavily on SSI and medicare have already been operating on thin margins the past few years. Funding cuts and a highly competitive private pay market is sure to thin out the crowd. 

Small facilities will consolidate into larger ones that have lower costs per bed. Current investors and operators with access to capital will be able to take advantage of these opportunities to absorb the residents from the small homes. Investors with multiple small facilities will have to bite the bullet and purchase or build larger homes to consolidate into fewer properties. That choice will ultimately be more profitable for them in the long run. 

New investors entering the market will have opportunities to do the same. Struggling facilities with poor management will be offered at a discount for investors to acquire, improve operations and absorb residents from other struggling senior housing and assisted living businesses. 

This will also open up a lot of great acquisition opportunities for the stronger REITs. Look for healthcare REITs with a healthy debt/EBITDA ratio, and access to liquidity without the need to sell a significant amount of new shares. These will be the players that are ready and able to make these discounted acquisitions. I also wouldn’t be surprised to see some mergers, which could be a real nice payday. 

I know this is quite the chain of events I’m predicting from the potential payroll tax holiday, but I see this same scenario eventually playing out either way. The payroll tax cuts are just likely to speed it up. Even the fear of executive actions from President Donald Trump resulting in medicare and social security cuts could cause funds to be prematurely reallocated. 

This is no different than any other market change for any industry. There are opportunities for investors to make a lot of money, and others will bury their heads in the sand and lose everything. Choose wisely on which one you’ll be.

Starting a Home Healthcare Business – 8 Questions and Answers

Starting a Home Healthcare Business – 8 Questions and Answers

Starting a Home Healthcare Business – 8 Questions and Answers!

Let us answer your most urgent questions about starting your home healthcare business. Learn how to launch your startup and the benefits of doing so now.

Why start a home healthcare business? 

You should start a home healthcare business because it’s the fastest-growing market.

As more and more baby boomers reach senior age, the number of people needing home health care services is increasing. 

Sources say that the demand for home health services could double by 2050. That means the risk of starting a home health business is very low right now!

Who should start a home healthcare business?

Anyone can start a home care business. However, people who have a background in healthcare have the upper hand. 

That’s because these people have the knowledge and understanding of what goes into this type of care. Intimately understanding the ins and outs of healthcare makes a business owner appear more trustworthy and intelligent. 

These people are more likely to land employees and clients. However, if this is not you, go above and beyond in showing people you have the empathy to stand out among the competition.

If you can demonstrate your understanding of the trade and that you care about people, you will have business success.

What are the different services and types of home healthcare businesses?

There are several different types of services that you can provide in your home healthcare business. Which services you offer to people will depend on the employees you hire and the type of home health business you are creating.


The following services can be offered to your potential clients.

  • Doctor care – A doctor will visit the patient at home to diagnose, treat, or perform check-ups.
  • Nurse care – Nursing care is the most common form of medical home care services. Nursing care varies depending on the patient’s needs. They can help with wound care, IV therapy, pain management, and overall monitor the patient’s health.
  • Physical, occupational, and/or speech therapy – Physical therapists help patients gain strength and mobility. Occupational therapists help patients be able to complete their everyday tasks on their own. Speech therapists help patients communicate with others more effectively. 
  • Medical social services – Social services provide patients with counseling and support in recovery. They also provide patients with resources so that they have access to everything they need to recover. 
  • Nurse Aides – Personal assistance usually comes from health aides. They help the person get out of bed, walk, bathe, and get dressed. Some may perform more than basic needs, based on instructions from the resident’s medical team. 
  • Homemaker – A homemaker comes out to a person’s house to help them with their household while being medically cared for. They help with meal preparation, housekeeping, laundry, and basic household chores. 
  • Companionship – Human beings are social creatures. As we age, we start to lose people we love. This can be hard. Providing companionship to senior citizens that need comfort is another great service to offer in your home health agency.
  • Medication services – Medical equipment and medication can be delivered at home. 
  • Transportation – You may or may not offer transportation services for patients to and from their appointments, or even for social gatherings at senior centers.
  • Nutritional support – A dietician comes out to a person’s house to assess their nutritional habits. They will come up with a plan to help the person meet their health goals through the foods they choose. 
  • Lab & imaging – Urine and blood tests can be easily taken from the home. X-rays can also be taken from the comfort of home with the help of portable x-ray machines. 
  • Home-delivered meals – Meals made and delivered to patients or the elderly. Churches normally provide this service, but it is something you can add to your business. 

Types of Business 

Now that you understand what services home health care agencies can offer, it’s time to understand the types of businesses you can have with those services. 

  • Non-medical – A non-medical business would be ideal for those who don’t have a background in healthcare, at least as a starting point. As a non-medical business, you can offer homemaking, companionship, transportation, and/or home-delivered meals. 
  • Medical – A medical home care business can offer services their employee is certified in. Let’s say you hire a dietician. That dietician can do what they are certified to do. This is sometimes also referred to as skilled home care.
  • Short-term – You offer short-term services to your clients (less than 60 days).
  • Long-term – You offer long-term services to your clients (more than 60 days).

You will need to double-check your state requirements for how long you can service your clients. Some states require you to be certified for long-term home health. 

What are the benefits of starting a home healthcare business?

There are a lot of benefits to starting a home healthcare business. 

One is that you will truly make a difference in the lives of others. 

Allowing patients to receive healthcare from home truly makes their lives a whole lot easier. People heal faster in the comfort of their homes. Plus, it’s a lot more cost-effective for the patient because they aren’t paying to rent out a hospital bed. 

This business changes lives. Not just the lives of your clients, but also the lives of your employees. 

You’re creating more opportunities for health professionals to continue doing what they love.

How it affects you…

If you have an entrepreneurial spirit, building and sustaining a business will change how you think and problem solve. 

But, I know what you’re looking for is how much you can make from starting a business in this market. Home health care is one of the most profitable businesses. While most home health care businesses profit over $100,000 per year, many have annual profits in the millions!

How much to start up a home healthcare business?

The average start-up costs for a non-medical home healthcare business total about $80k. The average cost of a medical-based healthcare facility is around $350k. The difference is in the types of employees and the equipment needed.

How do I start my home healthcare business?

Starting a home health business has steps like any business. The steps are…

Step 1. Create a business plan. Plan for at least the next 5 years. What do you need to do to grow your business? Take external forces into consideration where you can.

Step 2. Create a business entity. An LLC is recommended for small business owners. 

Step 3. Get an employer ID from the IRS. It’s like a social security number, but for your business.

Step 4. Register with your state. States need a record of businesses that are established in their state.

Step 5. Get any licenses needed. Check with your state licensing requirements for operating a home health business.

Step 6. Prepare finances. Creating a home health business is an investment!

Step 7. Create or outsource your procedures manual. Your patients are going to need a handout about what they expect when using your services. 

Step 8. Hire employees & fill up the schedule. As long as your business meets the proper requirements and you have the employee help, you can start taking clients. 

Step 9. Build a website & market online. Registering with local and online business directories is very helpful in getting discovered via the web. Create a blog about your services! 

Step 10. Buy or lease an office. An office isn’t necessarily the top priority in a traveling business like this. However, you’ll eventually want a space to go to work on different aspects of the business and dispute anything going on. 

Step 11. Do what you can to grow! It won’t be long before your business is earning a substantial profit.

When should you start a home healthcare business?

Home health trends are up. The sooner you start your business or agency the better. The senior population is rapidly growing, which means the sooner you can take advantage of the demand, the better for you and your business! 

Where is the best place for home health startups?

The best place to start your home health business is near senior housing, 55+ communities or age-restricted apartments. You can even start up near hospitals and try to market yourself in the area.

Starting up your business near one of these communities allows you to easily market your services to people who could benefit from your services. 


Starting a home healthcare business can be extremely profitable and fulfilling, regardless of whether you’re starting a medical or non-medical agency. 

Hopefully, this post helped you find what you need. If you have another question, please comment below. Feel free to help others out with their home health care questions. 

What Safety Features Should the Ideal Senior Living Facility Have?

What Safety Features Should the Ideal Senior Living Facility Have?

Getting older is a fact of life. No matter how well you take care of yourself, a time may arise when you need to consider moving to a senior living facility. And even if you are in perfect health, growing older means taking the necessary precautions to prevent accidents and injuries. Before making a final purchasing decision, you need to know that the facility you choose is equipped to take care of everyone else who resides there.

Safety Alert

Living by yourself as a senior citizen can be scary. With age comes safety risks, so when you’re looking to buy or to invest in a senior living facility, you want to make sure that it’s equipped with proper alarms for everyone who lives there. A reputable senior living facility should have alert systems installed throughout the community. People should be able to access them easily if needed, particularly if someone were to fall. Even independent living centers for elders who are healthy and full of vigor need that extra peace of mind.

Hand Rails

People of all ages can lose their footing, trip, and fall down. However, as people get older, it’s not uncommon for them to become unsteady on their feet. More so for seniors, falls can cause serious injuries. Take note of whether the facilities you tour have handrails installed. They should be in every bathroom, hallway, and staircase. Handrails should also be at the right height, so if someone falls, that person can reach them easily. This simple but effective upgrade should be a top priority.

Intercom Systems

Alert systems are not the same as an intercom system. While alert systems can call EMS, having an intercom system is also important, especially for seniors with reduced mobility. Being able to call for help, even in the next room, saves lives. If you don’t see one installed, ask whether you’re allowed to install one on your own. If you’re considering buying a unit, there may be restrictions on what you can and cannot do inside the unit or facility.

In addition to these above-mentioned safety features, take note of current residents and staff if possible. Inquire whether there are community activities that encourage positive social interaction. Social interaction is crucial, especially as people get older, to avoid feeling isolated and alone. Finally, ask whether there is a physician on staff. Many senior living facilities do employ both physicians and nurses just in case they’re needed. Take all of these amenities into account as you consider the available safety features at any senior living facility.
If you’re looking to buy an assisted living center property, get in touch with us today!