UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004

Commission file number 33-41863

                           NATIONAL HEALTH INVESTORS, INC.                            

(Exact name of registrant as specified in its Charter)

               Maryland               
(State or other jurisdiction of incorporation or organization)
               62-1470956               
(I.R.S. Employer Identification No.)
100 Vine Street
Murfreesboro, TN
37130
(Address of principal executive offices)
(Zip Code)

(615) 890-9100

Registrant's telephone number, including area code (615) 890-9100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the .
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes x No
There were 27,493,034 shares of common stock outstanding as of October 31, 2004.



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
September 30, December 31,
2004 2003
(unaudited)
ASSETS
     Real estate properties:
          Land $ 33,265 $ 33,600
          Buildings and improvements 365,025 366,215
          Construction in progress 422 588
398,712 400,403
          Less accumulated depreciation (120,214) (110,938)
               Real estate properties, net 278,498 289,465
     Mortgage and other notes receivable, net 139,317 149,892
     Investment in preferred stock 38,132 38,132
     Investment in real estate mortgage investment conduits - 16,043
     Cash and cash equivalents 127,006 93,687
     Marketable securities 23,561 26,835
     Accounts receivable 4,306 4,309
     Deferred costs and other assets 6,334 6,003
          Total Assets $617,154 $624,366
LIABILITIES
Unsecured public notes $100,000 $100,000
     Debt 55,683 62,100
     Convertible subordinated debentures 1,162 1,351
     Accounts payable and other accrued expenses 27,551 30,882
     Accrued interest 1,567 3,409
     Dividends payable 11,683 13,385
     Deferred income 3,365 3,595
          Total Liabilities 201,011 214,722
     Commitments and guarantees
STOCKHOLDERS' EQUITY
     Cumulative convertible preferred stock,
          $.01 par value; 10,000,000 shares authorized, 747,994
shares, issued and outstanding at December 31, 2003, stated at
           liquidation preference of $25 per share - 18,700
     Common stock, $.01 par value; 40,000,000 shares authorized; 27,490,178
          and 26,770,123 shares, respectively, issued and outstanding 274 267
     Capital in excess of par value of common stock 460,373 441,178
     Cumulative net income 539,849 502,421
     Cumulative dividends (598,946) (563,681)
     Unrealized gains on marketable securities, net 14,593 10,759
          Total Stockholders' Equity 416,143 409,644
          Total Liabilities and Stockholders' Equity $617,154 $624,366


The accompanying notes to interim condensed consolidated financial statements are an integral part of these financial statements. The interim condensed balance sheet at December 31, 2003 is taken from the audited financial statements at that date.



NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended

Nine Months Ended

September 30 September 30
2004

2003

2004

2003

REVENUES:
(in thousands, except share amounts)
     Mortgage interest income $ 4,281 $ 4,647 $ 13,950 $14,895
     Rental income 12,186 17,837 36,665 44,202
     Facility operating revenue 21,841 19,982 63,010 58,937
38,308 42,466 113,625 118,034
EXPENSES:
     Interest 3,105 3,437 9,308 10,601
     Depreciation 3,483 3,741 10,499 11,254
     Amortization of loan costs 37 37 111 260
     Legal expense 197 258 1,115 443
     Franchise and excise tax 79 65 215 528
     General and administrative 952 680 2,872 2,113
     Loan, realty, REMIC, and security (recoveries) losses, net --- 5,400 (896) 6,900
     Facility operating expense 20,000 18,762 60,282 56,922
27,853 32,380 83,506 89,021
INCOME BEFORE NON-OPERATING INCOME 10,455 10,086 30,119 29,013
     Non-operating income (investment interest and other) 1,594 1,786 6,521 4,587
INCOME FROM CONTINUING OPERATIONS 12,049 11,872 36,640 33,600
Discontinued Operations
     Operating loss - discontinued (17) (420) (464) (1,144)
     Gain (loss) on sale of real estate --- (397) 1,252 1,535
(17) (817) 788 391
NET INCOME 12,032 11,055 37,428 33,991
DIVIDENDS TO PREFERRED STOCKHOLDERS --- 397 514 1,192
NET INCOME APPLICABLE TO COMMON STOCK $12,032 $10,658 $36,914 $32,799
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE:
     Basic $ .44 $ .43 $ 1.33 $ 1.22
     Diluted $ .43 $ .43 $ 1.32 $ 1.21
DISCONTINUED OPERATIONS PER COMMON SHARE:
     Basic $ --- $ (.03) $ .03 $ .01
     Diluted $ --- $ (.03) $ .03 $ .01
NET INCOME PER COMMON SHARE:
     Basic $ .44 $ .40 $ 1.36 $ 1.23
     Diluted $ .43 $ .40 $ 1.35 $ 1.22
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
     Basic 27,488,855 26,739,985 27,178,491 26,716,411
     Diluted 27,769,366 26,999,079 27,457,222 26,973,343
Common dividends per share declared $ .425 $ .400 $ 1.275 $ 1.200



The accompanying notes to interim condensed consolidated financial statements are an integral part of these financial statements.

NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30
2004 2003

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income $ 37,428 $ 33,991
     Depreciation 10,540 11,567
     Loan, realty, REMIC, and security (recoveries) losses, net (896) 6,900
Gain on sale of real estate (1,252) (1,535)
     Amortization of loan costs 111 260
Realized gain on sale of marketable securities (1,995) (12)
     Amortization of bond discount (9) (23)
Amortization of REMIC discount (1,182) --
     Amortization of deferred income (230) (865)
     Decrease (increase) in accounts receivable 3 (2,313)
     Increase in deferred costs and other assets (442) (2,524)
     Increase (decrease) in accounts payable and accrued liabilities (325) 2,537
Decrease in accrued interest payable (1,842) (3,005)
          NET CASH PROVIDED BY OPERATING ACTIVITIES 39,909 44,978
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in mortgage and other notes receivable (875) (1,681)
     Collection of mortgage and other notes receivable 11,002 18,809
Disposition of mortgage notes receivable 1,750 --
Collection of real estate mortgage investment conduits 13,126 --
     Acquisition of property and equipment (1,110) (563)
Disposition of property and equipment 2,789 9,382
Acquisition of marketable securities (1,024) --
     Disposition of marketable securities 10,823 198
          NET CASH PROVIDED BY INVESTING ACTIVITIES 36,481 26,145
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt -- 9,110
     Principal payments on debt (6,417) (2,671)
     Redemption of subordinated convertible debentures -- (39,917)
Sale of common stock 891 349
Repurchase of common stock (578) --
     Dividends paid to stockholders (36,967) (31,903)
          NET CASH USED IN FINANCING ACTIVITIES (43,071) (65,032)
INCREASE IN CASH AND CASH EQUIVALENTS 33,319 6,091
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 93,687 43,062
CASH AND CASH EQUIVALENTS, END OF PERIOD $127,006 $ 49,153

(continued)



NATIONAL HEALTH INVESTORS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
September 30
2004 2003
(in thousands)
Supplemental Information:
     Cash payments for interest expense $ 7,656 $ 9,076
During the nine months ended September 30, 2004 and 2003, $189,000 and
$301,000 of Senior Subordinated Convertible Debentures were con-
verted into 26,993 and 42,989 shares of NHI's common stock:
                 Senior subordinated convertible debentures $ (189) $ (301)
                 Accrued interest --- (4)
                 Capital in excess of par 189 305
During the nine months ended September 30, 2004, $18,700,000 or 747,994 shares
of 8.5% Cumulative Convertible Preferred stock was called by NHI

for redemption into 676,922 shares of NHI's common stock:

Cumulative convertible preferred stock $(18,700) $ ---
Common stock 7 ---
Capital in excess of par 18,693 ---
During the nine months ended September 30, 2003, NHI acquired
property in exchange for its rights under mortgage notes receivable:
Mortgage notes receivable $ --- $ 13,069
Land --- (1,096)
Buildings and improvements --- (11,973)





The accompanying notes to interim condensed consolidated financial statements are an integral part of these financial statements.

NATIONAL HEALTH INVESTORS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(in thousands, except share and per share amounts)

Cumulative Convertible

 Unrealized Total
Preferred Stock Capital in Gains Stock-
Shares Amount Common Stock Excess of Cumulative Cumulative (losses) on holders'
at $25 per Share Shares Amount Par Value Net Income Dividends Securities Equity
BALANCE AT 12/31/03 747,994 $18,700 26,770,123 $267 $441,178 $502,421 $(563,681) $ 10,759 $409,644
Net income --- --- --- --- --- 37,428 --- --- 37,428
Unrealized gains on securities --- --- --- --- --- --- --- 3,834 3,834
Total Comprehensive Income 41,262
Shares sold --- --- 40,000 --- 891 --- --- --- 891
Shares repurchased --- --- (23,860) --- (578) --- --- --- (578)
Shares issued in conversion of convertible
   debentures to common stock --- --- 26,993 --- 189 --- --- --- 189
Shares issued in conversion of preferred
stock to common stock (747,994) (18,700) 676,922 7 18,693 --- --- --- ---
Dividends to common stockholders --- --- --- --- --- ---