Saral Satya Legacy

Evolution of senior living from ownership to rental/membership model in India

Senior Living industry in India has crossed its teenage and has now moved to its twenties. Like countries like US and Australia where senior living communities are well evolved over past many decades, India also is warming up for the concept. While the awareness about the concept is fairly established in last few years, the primary model still is Ownership one.

A careful analysis of senior living industry in the established countries shows the gradual and permanent shift from ownership model to membership model. The following reasons can be attributed for the shift:

  1. Changing Preferences: Many seniors prefer flexibility and freedom over the responsibilities and commitments that come with homeownership. A membership model allows them to enjoy the benefits of community living without the burdens of property maintenance and ownership.
  2. Financial Considerations: The cost of homeownership, including property taxes, maintenance, and utilities, can be prohibitive for seniors on fixed incomes. Membership models often offer a more affordable alternative, with fees that cover services and amenities.
  3. Focus on Services and Amenities: Membership models often provide a wider range of services and amenities compared to traditional ownership models. This can include access to healthcare services, recreational activities, dining options, transportation, and assistance with daily tasks.
  4. Social Interaction and Community: Many seniors value the social interaction and sense of community that membership-based senior living communities offer. These communities often organize events, outings, and activities to foster connections among residents.
  5. Ease of Transition: Moving from a traditional home to a senior living community can be a significant life transition. Membership models typically offer support services to help ease this transition, including assistance with downsizing, moving, and settling into the new community.

The shift from ownership to membership models in senior living reflects changing demographic trends, evolving preferences among seniors, and a desire for more flexible and supportive living arrangements as people age.

Where does senior living industry in India stand as on date?
Ownership model still is a popular model in India due to the following reasons:

  • Quick Cash flow: Senior Living Industry in India is not yet regulated and most of the developers/promoters are from real estate background. A sale model offers quick turnover of the project and enhanced possibilities of faster cash flow has attracted most of the existing developers.
  • Real estate focus rather than service focus: Early entrants to this industry are focused on real estate part and service is more of a salability factor. In fact, the industry is still growing with great resilience fighting social stigma and taboo to educate prospective customers to move into senior living communities. This was the only possible model which safeguarded the existence of early entrants to this industry.
  • Slow breakeven point in membership and rental model: Rental/membership model means all initial capital is managed by the developer and they have to wait for breakeven point along with operational expenses for a certain number of years.
  • Weightage to “sense of ownership” and “Investment Safety”: Indians still believe in owning real estate and want to have pride and sense of investment safety with ownership model.

7 Reasons why India will embrace rental/membership model in near future:

Senior living industry in India is maturing and customer is now aware of the concept. We foresee the following reasons will drive the Industry towards rental/membership model in near future:

  1. Minimal capital investment and liquidity: Membership models often provide more affordable options compared to outright ownership. Instead of purchasing a property, seniors pay a membership fee, which may be lower and more manageable, especially for those on fixed incomes. Compared to owning an apartment, this investment would be significantly lesser and a member can walk out when he/she wants. Challenges of managing the property by their nominee after their lifetime is reduced.

  2. Flexibility: Membership models typically offer more flexibility in terms of housing options and services. Seniors can choose the level of care they need without the burden of property maintenance or the constraints of a single fixed location. There would be flexibility of upgrading or downsizing their apartment sizes and services.

  3. Access to amenities and services: Senior living communities with membership models often offer a wide range of amenities and services tailored to the needs of older adults, such as healthcare facilities, recreational activities, dining options, transportation services, and social events.

  4. Reduced responsibility: Membership models relieve seniors of the responsibilities associated with homeownership, such as property taxes, repairs, and maintenance. This allows them to focus on enjoying their retirement years without the stress of managing a property.

  5. Community and social engagement: Senior living communities with membership models foster a sense of belonging and community among residents. By living among peers with similar interests and backgrounds, seniors can enjoy companionship, support, and social interaction, which can contribute to their overall well-being and quality of life.

  6. Continuum of care: Many membership-based senior living communities offer a continuum of care, allowing residents to age in place as their needs change. This means they can transition seamlessly from independent living to assisted living or skilled nursing care without having to relocate.
  1. Professional management: Membership-based senior living communities are often professionally managed, ensuring that residents receive high-quality services and support from trained staff members who specialize in elder care. Ownership models often see the ‘Owner’s Association’ getting into cost cutting activity and compromise on services. Cut down of services often badly affect vulnerable seniors.

-Dr.Muralidhara.C.P 
Senior Living Consultant

About the author:

Dr.Muralidhara is among the top 5 experienced professionals in India with experience in planning and managing more than 15 senior living and assisted communities in India. He comes with rich experience of managing more than 2500 senior living homes. He is presently consultant to Saral Satya Active Senior Living Community along with many other senior living communities.

Leave a Reply

Your email address will not be published. Required fields are marked *