Valuation of nursing homes
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The valuation of nursing homes is an essential process for owners, operators and investors who wish to know the real value of their assets. In an environment where the quality of care and operational efficiency are decisive, having an accurate technical and economic valuation is key to making strategic decisions on the sale and purchase, financing and asset management. Thanks to the wide experience and specialized knowledge of the Tecnitasa Group in this field, an exhaustive analysis adapted to the particularities of each residence is guaranteed.
What is a nursing home appraisal?
The appraisal of nursing homes consists of a technical and economic evaluation process whose objective is to determine the real value of a geriatric center. This analysis goes beyond the mere real estate valuation, as it integrates aspects related to the quality of care, efficiency in operational management and compliance with regulations.
The valuation takes into account elements as diverse as the physical condition of the property, the supply of medical and care services, the occupancy rate and the operating profitability of the center. The differentiation between the valuation of the property and the valuation of the set of services is crucial, as it provides a comprehensive view of the asset, which is essential for sale and purchase negotiations, obtaining financing and tax planning.
> Factors that influence the appraisal of nursing homes
The valuation of a nursing home is conditioned by multiple factors that determine its economic and functional viability. The most relevant aspects to be considered in this process are detailed below:
Location and accessibility
Location is one of the determining factors in any real estate appraisal and, in the case of nursing homes, it acquires special importance. Aspects such as the following are analyzed:
- Proximity to health centers and hospitals: a center located near hospitals and health centers has an added value, as it guarantees fast and specialized care in emergency situations.
- Ease of access: the presence of good public transport connections and the proximity to main roads facilitate the movement of family members, medical personnel and other visitors, which has a positive impact on the assessment.
- Surroundings and surrounding services: an environment that offers access to stores, pharmacies, green areas and other essential services improves the quality of life of residents and reinforces the image of the center, increasing its attractiveness in the market.
Capacity and care services
The number of places available and the quality of the services offered are determining factors in the appraisal. In this section, the following are evaluated:
- Accommodation capacity: the number of places available not only influences the profitability, but also the operational efficiency of the center.
- Levels of care: Homes can specialize in different degrees of dependency (low, medium or high). Specialization in care for people with complex needs, for example, requires greater investment in equipment and qualified personnel, which translates into a higher valuation.
Infrastructure and condition of the property
The physical condition of the building is another key factor in the valuation. Technical and conservation aspects that reflect the quality of the property should be considered:
- State of conservation and modernization: a building in good condition, with updated installations and adapted to current regulations, offers guarantees in terms of safety and comfort for residents.
- Space distribution: The internal organization of the building, which includes the layout of rooms, common areas and health care areas, directly influences the functionality of the facility. A design that favors the mobility and well-being of users translates into a higher valuation.
- Adaptability and regulatory compliance: The ability of the property to adapt to changes in demand and to comply with safety and accessibility regulations is fundamental. Investing in renovations and improvements to ensure compliance with these requirements increases the value of the asset.
Annual profitability and occupancy
Operating profitability and occupancy stability are essential economic indicators in the valuation of nursing homes. Among the aspects to be considered are:
- Revenues generated: the center’s capacity to generate revenue from the fees charged and other complementary services is analyzed.
- Occupancy rate: a residence with a high occupancy rate and, at times, waiting lists, denotes stability and strength in the market.
- Operational efficiency: good financial management, which includes cost control and resource optimization, has a direct impact on the profitability of the center and, therefore, on its valuation.
- Good reputation and customer satisfaction: a solid image and high levels of satisfaction generate trust, raising perceived value and improving negotiation conditions.
Geriatric sector regulations and licenses
Regulatory compliance is essential to operate as a nursing home and significantly affects the assessment:
- Licenses and permits: Obtaining and maintaining valid operating licenses are basic requirements. The absence or expiration of these documents may reduce the value of the asset.
- Safety and accessibility regulations: Respect for regulations guaranteeing the safety of residents and accessibility for people with reduced mobility is essential.
- Audits and inspections: Periodic inspections and audits certifying the correct operation of the center strengthen the confidence of investors and buyers.
> Why is it important to appraise a nursing home?
A professional appraisal of a nursing home provides multiple benefits to both owners and investors. An accurate and up-to-date valuation allows:
Determination of the actual value of the asset
A thorough appraisal helps to establish a fair price for the center, based on an objective and detailed analysis of all relevant factors. This is essential for:
- Negotiate the sale or transfer of the property.
- Identify areas for improvement that can increase the value of the asset.
- Ensure that the price reflects both the real estate value and the quality of the services offered.
Obtaining financing and real estate loans
Banks and financial institutions require approved appraisal reports in order to grant loans or credits. A professional report:
- It serves as collateral for obtaining financing.
- Demonstrates the economic viability of the project, which facilitates credit approval.
- Provides transparency and security in financial transactions.
Facilitating sale and purchase and transfer processes
In any sale or transfer transaction, have an accurate appraisal report:
- It generates trust between the parties involved.
- It allows to negotiate based on objective data and reduce uncertainty in the process.
- It speeds up the procedures by providing an accurate valuation of the property.
Tax optimization and estate planning
Appraisal is an essential tool for tax planning and wealth management:
- Allows you to accurately calculate the taxes associated with the property.
- It facilitates the organization of inheritance processes and the equitable distribution of assets.
- It helps to plan future investments or renovations, ensuring that every decision is based on up-to-date and objective data.
Assessment of business viability and sustainability
Before making any investment or expanding the range of services offered, it is crucial to know the economic viability of the center:
- The appraisal provides key information on current and potential profitability.
- It identifies opportunities to improve operational efficiency and increase competitiveness in the market.
- It helps to assess whether the business is sustainable in the long term, considering both revenue and demand for the service.
Benefits of hiring a professional nursing home appraisal service
Having an official service specialized in the appraisal of retirement homes offers multiple advantages that go beyond the mere valuation of the property:
Experience in the care sector
Technicians have a proknowledge of this type of assets, which allows them to: 1.which allows them to:
- Perform valuations that integrate both the real estate component and the assistance component.
- Detect critical aspects and improvement potentials that may go unnoticed in a superficial evaluation.
- Provide strategic recommendations based on experience and analysis of industry trends.
Official technical reports
The appraisal reports prepared by companies approved by the Bank of Spain, have the necessary validation to be accepted by financial institutions, investors and regulatory bodies:
- The methodology required by the regulatory agency for each type of appraisal or valuation is used.
- The report covers all relevant factors, from infrastructure to operating profitability, providing a comprehensive view of the asset.
- The clarity and detail of the document facilitates its use in negotiations, fiscal management and investment decisions.
Up-to-date and competitive valuations
The nursing home sector is constantly evolving and it is vital to have valuations that reflect the reality of the market:
- Professionals perform periodic analyses to adjust reports to current economic and regulatory conditions.
- Both macroeconomic and sector-specific factors are considered to provide competitive valuations.
- This allows owners and investors to position themselves properly in the market and make informed decisions that maximize the value of their assets.
Discover our residential real estate appraisal services
In addition to residential appraisals, Tecnitasa Group offers a wide range of real estate valuation services oriented to different sectors.
Latest appraisal news
Check our blog for up-to-date news and specialized articles on the appraisal industry. We offer information on trends, market changes, regulations and advice for owners and investors in this segment.
If you are interested in knowing the value of a residence of Whether you are looking to invest in a nursing home or the elderly, a professional appraisal report is essential. Our experts offer:
- A comprehensive analysis that encompasses the value of the property as well as operational efficiency and quality of care.
- Approved technical reports, accepted by financial institutions and investors.
- A personalized service that adapts to the specific characteristics of each center.
You can request an estimate without obligation.
Frequently asked questions about nursing home appraisals
What documents are required to appraise a nursing home?
In order to carry out an appraisal of a nursing home, the following documents are generally needed:
The simple note
Cadastral documentation
In the case of needing an appraisal as an economic operation, the following documents are needed:
Lease contracts and payments: Current lease documents together with the receipts of the last payments made, if any.
Architectural drawings: Detailed drawings with measurements or to scale (the estimate does not include the preparation of new drawings).
Financial information: Audited financial statements reflecting the revenues and expenses of the activity for the last three years or, in the case of projects under construction, a Feasibility Study.
License to operate: Official authorization required to exercise the corresponding activity.
How long does it take to perform an appraisal of a nursing home?
The process may vary according to the complexity and size of the property. It is always carried out in an agile manner, trying to deliver the reports as quickly and efficiently as possible. It includes the collection of information, on-site inspection and analysis of all relevant factors.
Is the appraisal valid for obtaining bank financing?
Yes, as long as the appraisal is performed by approved appraisal companies. Banks and financial institutions require quality and updated reports to support the granting of credit and real estate loans.
What is the cost of a professional nursing home appraisal?
The cost will depend on several factors, such as the location, size and complexity of the facility, as well as the type of report required. You can consult with our experts.
