“Should I invest in senior housing?” It’s a question I often get from new investors who’ve heard news of the “senior tsunami” shaking up American demographics – and ensuring a solid need for senior housing for decades to come. But for me, those investors are asking the wrong question. The real question isn’t whether senior housing is a strong investment – it’s which segments of senior housing will provide the strongest return and/or the least risk in today’s market.

The truth is, not all senior housing is created equal. In fact, there are so many segments of the market – independent living, assisted living, skilled nursing, communal housing, affordable housing – that it’s almost impossible to provide a blanket “yes”/“no” on the question of senior housing investment. Thus, if you’re considering riding the senior housing wave, be it through crowdfunding, REITs, private equity, or direct investment, I first recommend familiarizing yourself with these common pitfalls.

Pitfall 1: Failing to understand the sector. As I noted above, senior housing is not a simple sector. Part healthcare, part commercial real estate, part impact investment – there are lots of moving parts that make senior housing complex. For instance, in 2017, independent living got preferential treatment from investors, while skilled nursing went pear-shaped. Both forms of senior housing, both experiencing completely different results. Why? For one, the housing market was strong, so many older Americans felt like it was a good time to move into a senior or independent living community. Meanwhile, funding for Medicaid and Medicare saw drastic cuts, making funding of skilled nursing facilities incredibly dicey. Understanding the demographics of the community, as well as the availability of public funding, will go a long way in ensuring a strong investment.

Pitfall 2: Betting it all on one community. Investing 101: Diversification is key. Betting your bank directly on a single community or senior housing segment could leave you empty-handed. For instance, recently, Louisiana issued more than 30,000 eviction notices for its state nursing homes. Whether you’d invested in one of those communities or many of them, you’d be blindsided – and possibly broke. Diversification is essential for any smart investment.

Pitfall 3: Trusting market trends. Relying solely on averages will get you at best average results. Market statistics pulled for senior housing are an amalgamation of data from across the country, in many different senior housing segments. These trends need to be backed by specific local market data: how many competitors exist in the market? Are others on the way? What’s the demographic make-up – including salary and savings – of the community residents? Are there high-end amenities, hospitals, technology or transportation near the senior housing site that make it particularly attractive to potential residents? All these things factor into the strength of any senior housing investment.

Pitfall 4: Working with newbie operators. As with any trend that’s proven profitable, there are many operators hopping into the senior housing industry right now that may or may not understand the complexity of the senior housing business. For instance, how will they recruit and retain talent? How will they ensure patient safety and welfare in times of emergency or natural disaster? What’s their long-term plan for making the community a success? A senior housing investment may tie up your funds for anywhere from one to six years – or longer. A proven track record in the industry is essential.

Pitfall 5: Not recognizing your own weaknesses. We all like to think we’re great investors. The truth is, however, the senior housing industry is so complex that different investment options might be more promising for you, depending on your own personality. For instance, if you’re not into doing research and getting to know the fine details of an investment, a direct investment in a senior housing community might not be the best bet for you. If you don’t want to invest more than a few thousand dollars up-front, a crowdfunding platform with low entry thresholds might work best. If the ups-and-downs of the stock market give you anxiety, you might prefer to avoid REITs in lieu of a private equity fund. In any case, there are many options available to make your goal of senior housing investment a reality.

Today’s senior housing market is an incredibly promising one, but that doesn’t mean it’s without risk. Take your time to research your investment and understand the intricacies of the market. Know when to ask questions, seek second opinions, and, most importantly, when to say “no.” Investing in your own education of the sector could be the best investment you make.