Senior Housing REITs vs. Private Funds: How They Compare
By Haven Senior Living Partners · · 2 min read
Public REITs and private funds both give investors exposure to senior housing, but they differ on liquidity, volatility, taxes and control.
Key takeaways
- Public healthcare REITs such as Welltower and Ventas offer daily liquidity and low minimums.
- Private funds and syndications offer direct ownership of specific communities, depreciation benefits and potentially higher returns, with less liquidity.
- REIT prices move with the stock market; private values are appraised less often, which can look smoother but is not the same as lower risk.
- Many investors use both.
Side-by-side comparison
| Public REIT | Private fund or syndication | |
|---|---|---|
| Who can invest | Anyone | Usually accredited investors |
| Minimum | Price of one share | Set by each offering |
| Liquidity | Daily | Typically locked for several years |
| Price swings | Moves with the stock market | Valued periodically |
| What you own | A slice of a large portfolio | Interest in specific properties |
| Taxes | Dividends often taxed as ordinary income (with a possible qualified business income deduction) | K-1 with your share of income and depreciation |
| Fees | Embedded in company costs | Sponsor fees and profit share stated in documents |
| Control and visibility | Company-level reporting | Property-level reporting |
Where REITs fit
REITs are the simplest way to get senior housing exposure. The largest owners publish detailed quarterly results, and you can buy or sell any trading day. The trade-off is that share prices can fall with the broader market even when properties are performing well.
Where private funds fit
Private funds let you invest in identified communities with a named operator and a specific business plan. Depreciation can offset part of the income for tax purposes, and returns are tied to the property's own performance. The trade-offs are illiquidity, higher minimums, sponsor fees and dependence on one sponsor's execution.
How to compare fees fairly
Ask a private sponsor to show every fee — acquisition, asset management, construction, disposition — and how profits are split. Compare that with a REIT's operating costs. Our Preferred Returns and Waterfalls Explained guide shows how profit splits work.
Using both
Some investors hold REITs for liquidity and private investments for long-term income and tax benefits. Your advisor can help you decide the balance.
Want to see how a Haven offering compares? Schedule a call.
This article is for education only and is not an offer to sell or a solicitation to buy any security. Target returns are not guaranteed. Consult your own tax, legal and financial advisors.
