3.7 Billion Won Nursing Home Building Transaction in Jincheon-gun, Chungbuk, a Blue Chip for Investment in the Aging Era? Essential Checkpoints for Purchasing a Nursing Home Building!
As South Korea rapidly enters a super-aged society, the growth of the silver industry is remarkable. In particular, with increasing interest in nursing facilities that can expect stable profits, a nursing home building exceeding ₩3.7 billion was traded in Deoksan-eup, Jincheon-gun, Chungbuk, drawing attention from the real estate market. This transaction of a building that was already operating as a nursing hospital can be interpreted as an example of exploring investment opportunities in the aging era. However, investing in nursing home buildings requires careful consideration of special precautions different from general real estate transactions. Like a hidden gem, but an investment that can be risky if handled incorrectly, let's look closely at the light and shadow of nursing home building transactions.
1. Yongmong-ri 383, Deoksan-eup, Jincheon-gun, Chungbuk, a 3-Story Nursing Home Building Traded for ₩3.7 Billion
In January 2025, a 3-story building located at 383 Yongmong-ri, Deoksan-eup, Jincheon-gun, Chungcheongbuk-do, was sold for ₩3,712.3 million. It boasts a large land area, and its completion in February 2018 makes it a relatively new building. This building, which was previously operated as a nursing hospital, is located in a natural green area, boasting a pleasant environment, and its proximity to a 6m road provides decent accessibility.
| Item | Details |
|---|---|
| Location | 383 Yongmong-ri, Deoksan-eup, Jincheon-gun, Chungcheongbuk-do |
| Subway Station | (None) |
| Transaction Date | January 2025 |
| Sale Price | ₩3,712.3 Million |
| Land Area | 1,242.07 pyeong (4,106㎡) |
| Building Area | 404.85 pyeong (1,338.34㎡) |
| Zoning | Natural Green Area |
| Floors | 3F |
| Completion Year | February 6, 2018 |
| Land Price vs. Official Price | Approx. 6.51 times |
2. Aging Society, Increasing Demand for Nursing Facilities… Emerging as an Attractive Investment
South Korea is on the verge of entering a super-aged society, and accordingly, the demand for nursing facilities is steadily increasing with the growing elderly population. In particular, as it becomes difficult for families to support the elderly at home due to the increase in nuclear families and dual-income households, the need for nursing facilities providing specialized medical and nursing services is growing even further. These social changes are making the purchase and operation or investment in nursing home buildings an attractive option. Like a goose that lays golden eggs, the aging society provides continuous growth momentum to the nursing facility market.
3. Existing Nursing Hospital Operated Building, Consideration of Business Transfer
The building traded this time has a history of being operated as a nursing hospital. Obtaining new permits for nursing hospital facilities can be difficult due to complex procedures and strict criteria. Therefore, considering the acquisition of an existing operating business, that is, a business transfer, can be a good investment strategy. Acquiring a nursing facility that is already permitted and operating has the advantage of saving time and cost and securing a stable operating base. It is like starting a voyage by taking over a ship from a skilled captain.
4. But Careful Check of Precautions is Essential! Checklist for Investing in Nursing Home Buildings
However, when purchasing a nursing home building or transferring a business, it is essential to check special precautions that are different from general real estate transactions. A slight mistake can lead to unexpected problems and significant losses. Just like walking through a minefield, a cautious and thorough verification process is essential.
- Confirmation of Nursing Facility Permits and Related Laws: It is essential to carefully check whether the building is suitable for operating as a nursing facility and meets all necessary permits and related laws. In particular, relevant laws such as fire safety facilities, hygiene standards, and medical facility standards must be accurately understood and complied with.
- Analysis of Operating Performance and Financial Status: Operating performance, occupancy rate, and financial status of the former nursing hospital must be meticulously analyzed to predict profitability. In the case of business transfer, financial risk factors such as the amount of debt and outstanding receivables must be carefully examined.
- Inspection of Facilities and Equipment Conditions: The condition of the building itself, its safety, heating and cooling facilities, medical equipment, and other facilities and equipment must be carefully inspected. Old facilities or equipment can cause additional repair costs.
- Securing Manpower and Management Plan: A plan must be established to secure sufficient manpower, such as medical personnel, nursing personnel, and long-term care workers, required for operating the nursing facility and to manage them efficiently. In particular, securing skilled personnel is an important factor directly related to service quality.
- Surrounding Environment and Accessibility: Factors such as whether there are competing facilities nearby, easy access to public transportation, and whether the environment is convenient for patients and caregivers to visit must be considered. A pleasant and easily accessible environment positively influences patient attraction.
- Establishment of Business Plan and Operating Strategy: Beyond simply purchasing the building, a long-term business plan and differentiated operating strategy must be established. Providing high-quality medical and nursing services and enhancing patient and caregiver satisfaction are important.
5. Consideration of the Pleasantness of Natural Green Area and Urban Accessibility
The nursing home building traded this time is located in a natural green area, boasting a quiet and pleasant environment. This can positively affect the psychological stability of patients. However, natural green areas may have restrictions on development activities, so relevant regulations must be carefully checked if future expansion or change of use is considered. In addition, accessibility to the city center and contingency plans for emergencies must also be considered.
6. Utilization Scenario Based on Experience
If I were to purchase this nursing home building, I would first meticulously analyze the operating performance and facility condition of the existing nursing hospital and carefully review the possibility of business transfer. Reflecting the trend of the aging society, I would provide differentiated medical and nursing services and spare no investment in creating a patient-centered, pleasant, and safe environment. In addition, I would strengthen ties with the local community and strive to attract stable patients by building a positive image through various social contribution activities. Like a farmer expecting a bountiful harvest from a meticulously cultivated vegetable garden, I would operate the nursing facility with a long-term perspective.
Conclusion: In the Aging Era, Careful Approach is Essential for Nursing Home Building Investment
The case of the nursing home building transaction in Jincheon-gun, Chungbuk, shows that investment in nursing facilities can be an attractive option amidst the trend of an aging society. However, operating nursing facilities is different from simply a real estate rental business; it is a specialized field that requires consideration of various aspects such as medical and welfare-related laws, personnel management, and service quality. Therefore, if you are considering investing in a nursing home building, you should approach it carefully to reduce risk factors and lead to successful investment through sufficient market research and meticulous due diligence. Like a skilled navigator, you must meticulously identify and prepare for all risk factors to lead a safe and successful voyage.