WHY CARE HOMES
INVESTMENTS IN THE UK REPRESENT A SAVVY FINANCIAL MOVE
When looking at properties in the UK to invest in, it can be difficult to know where to focus your attention. That
said, when you look at care homes in terms of return on investment (ROI), it
soon becomes evident what a solid opportunity they represent.
In the face of continuing, economic uncertainty
due to both Brexit and Coronavirus, care homes are predicted to continue to be
one of the best routes for anyone looking to invest in the UK. In this article, we look at exactly what makes including care homes investments in the UK part of your portfolio such a good idea.
So, why not pour yourself a warm drink, sit
back and let us take you through the many attractive benefits that the UK care home
investments offer.
ASSET-BACKED,
REGULAR INCOME FOR INVESTORS
The first and perhaps most compelling reason why putting money into care homes is a great idea is that they are investments with guaranteed returns. In addition to the capital gains that can be achieved through investing in properties in the UK, care homes offer a fixed regular income that involves no fees nor effort on the part of the investor.
This ongoing income is asset-backed too, which means whatever happens to the residual income provided by care home operators, you’ll always retain the value of the property which will typically always remain on an upward trajectory. Sure, there are ups and downs in the UK property market, but the overlying trend is always one that looks upwards.
CARE HOMES ARE IN
HIGH DEMAND FOR THE LONG HAUL
Another of the reasons why care homes investments in the UK are so popular is the high demand for what they provide now and in the future. The UK elderly care sector is already thriving, with almost 12 million citizens in Britain currently over the age of 65 and it’s a number that’s growing all the time.
In fact, by 2040 (which sounds like a long way in the future, but is only actually 20 years away), there are predicted to be 15 million elderly people living in Britain. Uk investments of this nature have a solid foundation as the demand for rooms in care homes can only grow going forwards.
A WIDE RANGE OF
INVESTMENT OPPORTUNITY
In order to meet the long-term need for care home spaces in the UK, new waves of investment are certainly going to be required in the coming years. This has led to ever more opportunities to make investments in care home properties in the UK in both the public and private sectors.
For example, you could invest in luxury care homes, care homes funded by local authorities or even facilities that offer specialised care. What’s more, the ageing population in the UK is year on year, getting more wealthy, meaning that those entering retirements have money to invest in it, driving demand for luxury private establishments.
UK CARE HOME
INVESTMENTS OFFER HIGH YIELDS
The popularity of care homes investments in the UK is largely driven by demand, but also by the fact that the returns are so attractive. This completely ‘hands-off’ investment is the kind of stress-free opportunity many people look for and it’s not unusual for an annual return of over 10% to be realised.
All this on top of an asset that pays you good, regular money for literally doing nothing. Care homes in the UK are fully-managed by those running them, so all that’s left for investors to do is to collect that periodic payment. It really is that simple.
Compare this to something like stocks and shares that are much higher risk and that don’t offer any kind of capital growth. A yield of between 4-6% is considered quite good but is heavily influenced by market changes when making any kind of profit can be hard to achieve.
HOW EASY IS IT TO
GET INTO CARE HOMES INVESTMENTS IN THE UK?
The good news for anyone looking to invest in the UK care industry in this way is that it's a fairly simple process to navigate your way through. Typically speaking, operators will identify those care homes that are in need of investment for either improvement or refurbishment works.
These same operators will also know which care homes are underperforming and those that perform well and will purchase the freehold of the property in question when a clear path to profitability has been identified. Then, after the freehold of the care home has been purchased, separate units are sold to different investors on a 250-year lease.
Then each investor leases their units back to the operator, who then deals with all tenancy and maintenance issues. From this point, investors have no further input and simply sit back and wait for their quarterly or annual returns to roll in.
CARE HOMES ARE ONE
OF THE BEST UK INVESTMENTS
Even from what we’ve covered here, it’s pretty obvious that care home investments are one of the savviest you can make. Let’s take a brief recap on exactly why that is, whilst adding a few extra points in for good measure:
● Annual yields of 10% or more are very common ● You completely own your investment, with title deeds registered with the UK land registry ● It’s an investment with assured capital growth ● Aside from investing, it’s a 100% hands-off experience ● It offers immediate regular income ● Transparency is assured by the Care Quality Commission ● It’s an ethical investment that contributes to the community
So, whichever way it’s sliced, anyone with the capital to make care homes investments in the UK is pretty much guaranteed that their money is always working hard for them. What’s more, with the demand being as high as it is, it’s not a situation that’s going to change anytime soon.
We hope that you have enjoyed reading our blog and that it has adequately expressed what a great investment opportunity care homes are, especially when compared to other higher-risk or lower-yield options.
