When you evaluate a retirement home a loved one, you are likely to consider the standard of care delivered, the attractiveness of the facility, how friendly the staff is, how convenient the home is to where you live, and other qualitative characteristics. You should also consider the financial sustainability of the home. You want to avoid homes that are stretched financially to avoid the deteriorating care that would likely follow. Further, you want to avoid having to move your loved one again in the future. Demand retirement homes has fallen because of the economic weakness of 2008-2009. This weakens their financial condition and should heighten the concern of potential new residents. Here are methods of gathering information to assess the continuing viability of a home. HOMES IN GENERAL Generally, retirement homes are overseen by state agencies. Ask the home what agency oversees them. Go to the agency's Web site and see what information you can find. Agencies generally grade the homes. Take a look at the Web site known as http://www.carepathways .com ratings on homes. Ask the home to show you their last written review. Is the home accredited? Some homes choose to get accredited by the Continuing Care Accreditation Commission (CCAC). Nationally, only about 15% of retirement homes are accredited. Staff turnover in management is a good indicator of a stable business. How long has the management been there? What is the occupancy rate? Ask what their break-even occupancy is. Ask how they came through the 2008-2009 period. If they tell you everything is wonderful, I would doubt it. Break-even occupancy is probably in the range of 88%-90% occupancy. One or two percentage points of profitability produce a big dollar difference to the owner. Why does this matter? If it is a for profit and the owners are consistently losing money, they will either look to sell or reduce services to cure their losses. How much have the monthly charges or service fees risen each year? Ask if there is any reason why this increase would change in the future. Is the building going to require extraordinary maintenance? Is there a lot of local competition? Where does this retirement home fit in relative to others locally? Is it the most expensive? If the local economy is weak, the most expensive may be likely to lose residents to less expensive homes. Are there any new retirement homes under construction in the local area? If so, do they plan to have services or facilities that are more compelling? Is there a waiting list? This indicates demand the facility. Is the surrounding environment losing population? Have major businesses closed their facilities? The local chamber of commerce can give you population statistics. Retirement homes are either publicly owned or privately owned. If the home is publicly owned, you will have access to lots of information about the financial condition. When a home is privately owned, the amount of hard data about their financial condition may be limited. You can use your intuition to gather a mosaic of the financial strength of the home. Publicly Owned Two of the best known publicly owned home companies are Sunrise Senior Living and Assisted Living Concepts. To evaluate a publicly owned home, start with Yahoo! Finance and enter the name of the company. Start with the basic profile on the Web site. Read the data presented there. Look at the number of homes they own and the geographic locations. The most important piece of information is the operating cash flow. You can find this number on the bottom of the left hand column on the Yahoo! Finance Key Statistics page. You want a home that is profitable to its owners. You can also look at the stock chart a 5-year period. This will give you an idea of how well regarded the company is as a going concern. Go on the company Web site and request a copy of the annual report and 10-K report. …