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There are many notable trends in the nursing home marketing for 2014. Find out what the top five are and why they changed.

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Top 5 Trends of 2014 to Watch for in Nursing Homes for Sale

When you are looking for nursing homes for sale, it is important to pay attention to the latest trends. These ensure the property you want is up-to-date with the technology, design, and needs of its residents. In short, it makes it easier to create a profit. Along with this, it can also help adjust the pricing before purchasing. If, for example, the home does not meet these trends, you may consider negotiating to a lower price. Though there are many appearing, these are the top five to look for.

1. Increased Marketing for Not-for-Profit Nursing Homes

Not-for-profit assisted living homes for sale and established will be changing their marketing strategies in 2014. Currently, most non-profits rely on the good will of others such as support groups, religious organizations, or other donations. As the debate over not-for-profit and profit homes grows, non-profits will need to add capitalized marketing strategies such as radio, TV, and print advertisement. It may even be necessary to utilize social media and other Internet marketing tools. The marketing will increase as the debate between the two types of homes does as well.

2. Efficiency in Technology

Smart technology like tablets and phones is now utilized everywhere including nursing homes. Health monitors now connect to the Internet as well for easy access to data. This means all nursing homes are going to need efficiency data collecting and sorting technology. Some properties have the data collected, however, it is not shared and remains separated from other important information. An efficient nursing home utilizes a shared wifi and data collection point so all information is shared across the network. This allows for open communication through any technology, creating an effective operating system. If you are looking to buy healthcare property, ask what type of technology it has.

3. Interest Rates Rise on Nursing Homes for Sale

With the improving economy come higher interest rates for all property types including nursing homes for sale. This makes the homes harder to finance as other costs rise along with the interest such as those necessary for improvements. There is a smaller margin for error since your monthly mortgage payment is going to increase. To offset this, you will notice that the rents and rates given to its residents need to go up as well. While it helps cover your bottom line, it may make it harder to fill vacancies.

4. Customize the Space

Rather than being constrained in the property’s first design, many assisted living homes for sale can now be customized. This means changing finishes on hardware, paint colors, or countertop material. While it may seem simple, residents are going to demand flexibility and quick results. The property that allows customization is going to win the resident.

5.  Increase in Lawyer Needs

If your best friend is not a lawyer, you may want to find one who is. Lawyer needs are going to go up in 2014 and with this so will your budget. Any assisted living brokerage professional will recommend to significantly increase how much money you plan to spend. Lawyers are needed to ensure state and federal regulations are met on a daily basis.

Other trends to watch for include

  • Higher Media Influence
  • Increased Staffing Need
  • Familiarity with Brands
  • Continued Caps on High End Real Estate
  • Older residents

Though nursing homes for sale increased in price with the real estate market, now is the time to buy if you want to get in. The prices are going to only continue in their rise. If you follow these trends, you may find it easier to stay current in the market.

Factors Leading to Skilled Nursing Facility Bankruptcies

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The skilled nursing facility industry has been dealt several successive blows in recent years, leaving many SNF owners with few options to keep struggling facilities afloat. As a result, SNF bankruptcy is becoming increasingly commonplace.

Financial Realities Lead to Tough Circumstances

The economic downturn seems to have impacted everyone, but a series of laws, amendments, and shifts in the market have been especially difficult for those in the skilled nursing industry. Here’s a brief list of what has occurred:

  • 1997 – Balanced Budget Amendment Act allows states to mandate managed care plans for individuals wanting Medicaid coverage for nursing home services, resulting in extremely low negotiated reimbursement rates
  • 1999 – Health Care Financing Administration changes Medicare reimbursement, almost immediately triggering a round of SNF bankruptcies
  • 2008 – Economic downturn and official “bursting” of the housing bubble guts many retirement savings accounts, negates home equity, and makes selling a home difficult for seniors
  • 2010 – Patient Protection and Affordable Care Act increases benefits for in-home care, reducing overall demand for SNFs and effectively ensuring that those who are in SNFs will be frailer and in need of more care
  • 2011 – Centers for Medicare & Medicaid Services announced an 11.1% reduction in reimbursement rates, which was twice as bad as what had been predicted
  • 2011 – As a direct result of this announcement, stock prices for publicly traded SNFs plummet
  • 2012 – Medicare Payment Advisory Commission recommended an additional 4% cut in reimbursement to SNFs that will go into effect in 2014 and recommended no cost of living adjustment for 2013

Debt and expenses remains high among SNFs. This is particularly difficult to manage as the majority of unpaid Medicare co-payments are owned by state governments, and states lack the financial resources and the will to reimburse SNFs for the money owed. Some nursing home brokerage firms have been able to help clients buy a skilled nursing facility when it’s in distress, saving their clients money and helping the previous owners avoid a messy financial conclusion.

The Bankruptcy Process

When a skilled nursing facility is no longer financially solvent, bankruptcy may be the only route. Working with financial and legal experts, the SNF will choose between two types of bankruptcy: Chapter 7 (liquidation) and Chapter 11 (reorganization). With a Chapter 7 bankruptcy, a trustee is appointed to assess the company’s debts and assets and to collect and reduce property to raise cash, which is then distributed to those who are owed money. A trustee is also appointed to ensure patients are responsibly transferred before the SNF closes. In Chapter 11, the owner acts in lieu of a trustee, and works with a committee of creditors. They find ways to work with vendors and pay employees while continuing to operate, with the ultimate goal being to regain firm financial footing – usually by restructuring the business and selling off some of the company’s property.

Bankruptcy can provide an opportunity for those who plan to buy nursing homes. They may find a SNF for sale at a substantially reduced price, which can enable them to make improvements or operate in the black that much more quickly.