While you can make money slowly in aged care, or build up real estate assets, you can also lose money rapidly. That’s a warning from a senior aged care insider who spoke to Eternity.

“Right now is NOT a good time to be in aged care.” – Aged care insider

“The aged care mantra of both Coalition and Labor governments has been ‘de-regulate, de-regulate, de-regulate’. The next big change is the removal of bed licenses, which is due in the next couple of years. This means that long-existing homes will face competition from private sector ones opening up just down the road.

“Right now is NOT a good time to be in aged care.”

Some church-linked agencies will fall into a particularly vulnerable group – undercapitalised and with older facilities.

“They tend to have less access to capital as they have no shareholders, with only accumulated funds from ongoing contributions. Those targeting lower-income people tend to have less reserves. This especially applies if they have been ripped-off by churches owning the properties.”

The traditional church network or denominational set-up – where an aged care charity forms part of a pool of assets – means that the church is especially reliant on the management of the charity. Having the charity as a separate organisation, rather than controlled by the church, may be a safer path. A number of church groups, such as the Tasmanian Presbyterians and the Canberra-Goulburn Anglicans, have sold at least some aged care facilities.

This also applies to schools where, like aged care, it is possible to lose money. Over-capitalised schools in north-west Melbourne have caused pain for the Uniting Church, and the Bathurst Anglican diocese (region) was left with heavy debt after founding new schools.