A retirement property or a care home investment is a specialist property investment strategy that has been outperforming other asset classes in the UK’s most recent year. For experienced property investors, a retirement home investment may be an attempt to diversify their portfolio. For other investors it may be a way to put money aside for their retirement through a hands-free passive monthly income from rent.
- Make an informed decision
You need to decide if a care home investment is right for you. There are other property investment strategies, so think about why a retirement home is different from other investments. If the benefits seem to suit you and your needs, then it will be a good opportunity to make a passive income.
- Find out what the exit strategy requires
If you are investing in a care home property, then you are likely going to be in it for the long-term. Developers offer investors a 10 year rental promise at fixed rates of up to 10% . If you wish to sell the property before the period is complete or after the contract is over you need to know how to go about it. It can be costly to keep a property, so if you don’t want to carry on with the investment there is no point holding onto the property.
Usually developers will have a buy back option, where they purchase the property back after 5 years for 110% of the buying price or after 10 years for 125%. This means that for a £80k investment, you can have the option to sell it back for £88,000 or £100,000 respectively.
- Research the ideal location
Any property investment is all down to the location. Since property market factors and prices are changing beyond an investor’s control, it isn’t worth skipping the research. Generally, locations that are in the country-side away from big and busy cities have a higher density of the elderly population. Areas such as West Dorset, North Norfolk, East Devon and East Dorset are the fastest ageing areas in the UK.