Aged Care Investment

With Australia’s ageing population creating a growing demand for aged care facilities, investing in aged care property has become an increasingly attractive option for investors. But what makes this sector so appealing, and how can you ensure you make the most of this opportunity?

What is aged care property?

Aged care properties are specialised facilities designed to accommodate older Australians who need varying levels of care and support. These facilities can range from independent living units (ILUs) in retirement villages to high-care nursing homes with specialised services such as dementia care.

These properties are often operated by experienced aged care providers who lease the facilities on long-term agreements, providing investors with consistent income.

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Recent trends in the
aged care property sector

The sector is experiencing increased investment in premium facilities that offer a higher standard of living, with amenities like private gardens, wellness centres and personalised care plans.

There is also a strong push towards integrating technology, with innovations like smart monitoring systems and telehealth services becoming common.

Regional Australia is also seeing an increase in aged care developments, as regional cities experience population growth and rising demand for localised care options. Additionally, government reforms in aged care funding and compliance are encouraging providers to modernise their facilities, creating new investment opportunities.

What is the future of
aged care?

The Treasury’s Intergenerational Report 2023 forecasts that Australia’s population will age significantly over the next 40 years. The number of people aged 65 and over is projected to more than double, while those aged 85 and over will more than triple. Remarkably, the population of centenarians is expected to grow six-fold.

As Australia’s senior population continues to grow, demand for aged care facilities will only increase. Investors who position themselves now can benefit from this long-term growth.

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To maximise your return on investment, consider targeting properties in high-demand locations with growth potential. Upgrading older properties to meet modern standards can justify higher rents and attract a more reliable tenant base.

Professional property management can also help ensure your boarding house operates efficiently and remains compliant with local regulations.

Why buy
aged care property?

Aged care property investments offer a range of benefits that can make it an appealing investment option.

One of the most significant advantages is the reliability of tenants. Aged care operators are typically well-established businesses with long-term leases, providing predictable rental income for investors. These leases often include regular rent reviews tied to inflation, ensuring income growth over time.

The sector’s resilience during economic downturns is another key benefit. Aged care is an essential service, meaning demand remains stable regardless of broader economic conditions.

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Aged care property also stands out for its capacity to deliver steady yields over time. Unlike other commercial sectors that fluctuate with market sentiment, these assets are underpinned by consistent demographic demand and government-supported funding frameworks. This stability translates into reduced vacancy risk and reliable cashflow, making them a cornerstone asset for those seeking both security and longevity in their portfolios.

Beyond income reliability, aged care property investments offer opportunities for capital growth as land scarcity and regulatory compliance raise the value of high-quality, purpose-built facilities. Strategic acquisitions in growth corridors or regions with ageing populations can yield exceptional long-term performance, particularly where supply remains constrained.

Key factors to consider when
buying an aged care property

When investing in aged care properties, there are several factors to keep in mind.

Consider the demographics of the area – regions with an ageing population or planned infrastructure developments often present the best opportunities.

The location should also cater to the needs of the ageing population, with easy access to healthcare, public transport and other essential services.

The facility’s design, layout and condition should also be carefully assessed. Modern amenities, sustainable features and compliance with current regulations will not only attract tenants but also future-proof your investment.

It’s also important to evaluate the operator’s track record. A reputable operator with a history of providing quality care can significantly reduce investment risks.

Finally, review the lease agreement in detail, paying attention to the length of the lease, rent escalation clauses and the financial stability of the operator.

To maximise returns, focus on properties with strong tenant covenants and high occupancy rates. Properties with room for expansion or upgrades can also offer significant long-term benefits. Partnering with an experienced buyer’s agent, like Costi Cohen, can help you identify high-performing properties and mitigate potential risks.

Why buy
with Costi Cohen?

Investing in aged care property without expert guidance can lead to costly mistakes. Navigating complex lease agreements, understanding regulatory requirements and assessing operator quality are challenges that inexperienced investors may struggle to manage.

Costi Cohen offers a tailored approach to property investment, ensuring you make informed decisions that align with your financial goals. Our team conducts comprehensive market analysis, identifying aged care investment opportunities in high-demand areas with strong growth potential. We also perform detailed due diligence, reviewing tenant covenants, lease terms and property conditions to minimise risks and maximise returns. From property selection to negotiation and settlement, we handle every step of the process, giving you confidence in your investment.

Get unrivalled access to off and pre-market opportunities

In Australia’s tightly held commercial real estate market, true opportunity rarely reaches public listing. The most valuable assets are traded quietly through networks and relationships. At Costi Cohen, we sit at the centre of this exchange. More than 85% of property acquisitions we secure are sourced off or pre-market, long before they appear on mainstream channels. This access is the result of decades of industry connection, deep agent relationships and a reputation built on discretion and performance.

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Our network extends beyond traditional listing platforms, encompassing commercial agents, developers, fund managers and private owners who trust us with early visibility of upcoming aged care investment properties. We examine these assets with a critical eye, filtering them through our acquisition framework to identify those with genuine growth and yield potential. With us, you gain a first-mover advantage in one of the most competitive asset classes in the country. We understand that your goals are distinct, which is why we tailor each search to align with your portfolio requirements and long-term outcomes. From sourcing and evaluation through to negotiation, we protect your interests and position you ahead of the market.

Sidestep pitfalls in aged care investment properties

Investing in aged care property offers strong potential, but it’s not without its complexities. This sector is highly regulated, and without the right expertise, you can face challenges that impact profitability.

From navigating compliance obligations to understanding tenant structures and operational risks, the aged care market demands a refined, informed approach. Oversights in these areas can cause delays, costly adjustments or assets that underperform over time.

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Aged care properties differ significantly from traditional commercial assets. Leases are often intricate, operators may hold specific licensing requirements and market valuations depend on both property performance and operational stability. Many investors also underestimate the importance of conducting thorough due diligence on the tenant’s business model, reputation and financial standing. These factors influence not only income security but also how a lender values the asset. Understanding these nuances before purchase is essential to protect your investment. Costi Cohen specialises in helping clients avoid these pitfalls through strategic guidance and informed acquisition planning. We assist with lease reviews, coordinate building inspections and analyse operator performance to ensure every aspect of your investment is sound. Backed by more than 60 years of commercial property expertise, we apply a meticulous approach to uncovering risks so you can move confidently toward a high-performing, future-ready aged care asset.

How to finance an
aged care property investment

Financing an aged care property typically involves a mix of commercial property loans and personal equity. Most lenders require a deposit of 30-40%, so it’s important to assess your borrowing capacity early.

Because aged care assets are viewed as specialised commercial properties, lenders often apply more rigorous assessment criteria. Factors such as tenant covenant strength, lease duration and operator reputation play a critical role in determining loan terms. Investors who can demonstrate a clear acquisition strategy are more likely to secure competitive financing arrangements with favourable interest rates and flexibility.

Working with a finance broker who understands the aged care sector can help you secure competitive rates and tailored loan terms. Some lenders specialise in aged care investment properties, offering products designed to meet the unique needs of this market.

Secure your next aged care property investment with confidence

Costi Cohen is one of Australia’s most prominent full-service commercial buyers agencies. With us, you gain access to off and pre-market aged care assets others can’t. Our team combines over 60 years of expertise with powerful industry connections to help you secure high-performing, future-ready investments. Speak directly with our specialists or complete the form below to discuss your acquisition goals.

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