HOW CARE HOME INVESTMENTS OFFER A PASSIVE
INCOME FOR INVESTORS
In the world of property investments, care
homes are a relative newcomer, but what can’t be denied is that this growing array of offers providing an attractive passive income. At the same time as offering an
investment in the future and wellbeing of our elderly loved ones, care homes
exist in a market that’s naturally being buoyed by the steadily increasing life
expectancy of UK citizens.
One of the main selling points of a care home
investment is the fact that a passive income can be achieved whilst also
offering the added benefit of capital growth of the property itself. Figures
from the Office for National Statistics (ONS) show that over 18% of the
population in the UK is over 65 and by 2044, this is expected to increase to
25%.
AN INCREASED DEMAND FOR CARE FACILITIES
Of course, this growing elderly population
needs to be catered for, which naturally means that the demand for long-term
care home facilities is also increasing. Studies show that over the next half
century, the number of care home beds needs to rise by around 50% to keep pace,
so there seems to be little doubt that places in this kind of facility are
highly sought-after and becoming more so every day.
At the point of writing, hospital beds that are
occupied by seniors cost the NHS up to £250 each day and when there are no
available care home beds, they’re unable to move them on. The need for more
care homes in the UK going forwards is undeniable, meaning that it’s a sector
with huge potential for investors as it’s pretty much guaranteed to be
financially viable.
A LACK OF PUBLIC FUNDING IN THE SECTOR
The backdrop to this situation is an elderly
care sector that has seen consistently underfunded from the public purse in
recent years, with around an 18% drop occurring in the ten years between 2005
and 2015. Whilst this underfunding is unfortunate, what it does do is open the
door for any private investors looking to get on board in a sector that is set
to significantly grow.
In fact, care home investments have
continuously shown themselves to be a sustainable and profitable asset class -
outstripping other UK property avenues by a factor of 2 or more. These robust
returns illustrate that the risk to reward ratio is very much stacked in favour
of the investor, which is why more and more savvy profit-seekers are turning to
the investment opportunity.
THE FULL HANDS-OFF INVESTMENT EXPERIENCE
Another of the reasons why care homes
represent such a great investment opportunity is that they manage themselves
and offer the full ‘hands off’ experience. Your investment will be fully
managed by the operator of the care home, so all you have to do is sit back and
collect the rental payments as they come through. What’s more, the income is
immediate.
The fact that the care home in question will
be fully managed and maintained means that you never have to worry about the
upkeep - as it’s all included and taken care of by the operator. Anyone who’s
ever invested in other types of UK property will tell you that maintenance and
upkeep is something that often eats into the income it provides.
CARE HOME INVESTMENTS OFFER A GREAT LONG-TERM
YIELD
If you’re looking for an investment that can
provide you with a residual income well into your retirement, then care homes
most certainly fit the bill. The rental yields are so impressive that many
people simply choose to leave their money in place and reap the rewards year
after year. Some savvy investors even choose to invest in retirement homes so
that they can themselves move in when the time arrives.
Occupancy rates are guaranteed to remain high,
as we’ve seen, so it’s an income that can be relied upon. This difference is profound when compared to
commercial and residential investment opportunities that don’t come with
anything like the same degree of certainty when it comes to finding tenants.
SO, WHAT KIND OF PASSIVE RETURNS ARE WE
TALKING ABOUT?
The available passive rental income return on
care home investments are far in excess of other types of UK property
opportunity, as we just mentioned - but what are we actually talking about?
Well, with First UK, for a £75k investment you’ll receive an 8% return in the first year, 9% in years 2 and 3 and an impressive 10% in years 4 and 5.
If you’re able to invest more, £150,000 offers you a strong annual 10%
return from the get-go and then with the ‘Guaranteed Buy-back’ scheme, you get
a fixed price to allow you to plan your exit strategy when the time comes, be
it a year 3, year 5, year 9, year 15 or year 20. The longer you can leave your
investment in place, the more you’ll make, with this buyback feature being
optional.
A GREAT INVESTMENT WHICHEVER WAY YOU SLICE IT
As you can see, you don’t have to research the
subject too extensively for it to become obvious that care home investments
represent risk-free returns at a level that other opportunities simply can’t
compete with. At First UK, we’ve been assisting clients to take advantage of
these high returns for many years and you could be next.
Moving forward on this type of financial
commitment can be daunting and more than a little overwhelming, but when you
see just how much potential growth there is in the sector, you realise that the
odds are stacked in your favour. Of course, you always need to do due diligence
with this kind of thing, but with the right expert assistance, the rewards are
there to be grabbed.
So, if you’re thinking of getting involved in
care home investments, then the First UK would certainly like to hear from you.
Our friendly and professional experts are on hand to show you exactly how easy
and stress-free life-changing financial investments can be.
That’s it from us for this time. Check back
with us soon for more tips, news and advice from the world of high return
property investments.