not2old

yes I know its not for everyone, yet knowing & checking out seniors accommodation, I thought 'would it be possible' to do a buy to let on seniors housing?

Since seniors sheltered housing is normally for those over aged 60 who want safe & secure rentals, warden on site, to be with aged type folks who are always watching things & who generally are lights out by 10PM.

Has anyone considered or looked at seniors housing as an alternative supplementary investment income?

In an area such as Southport in the North West of England, a one bedroom can be bought for less than £50k, some higher of course with corresponding higher rental.

It can be rented out on an assured tenancy to some nice retiree, who you'd think would make good tenants as well as the ROI would be decent?

As an example & these kind of properties are available in different areas of the UK

To buy

1 bedroom retirement property for sale in Park Road, Southport, Merseyside, PR9

Then to let it out

1 bedroom apartment to rent in Homesands House 50 Park Road Southport Lancashire, PR9

Numbers ...

Investment purchase = £47,500

Gross Income £595/mth x 12 = £7140

less yearly maintenance & ground rent = £1920
Insurance & Misc = £470
council tax paid by tenant = £0

Total expenses = £2390

Net income = £4750 or ROI 10%

fulwood

The properties are nice. I think it's a good idea not2old..

Pistolpete2

These retirement properties are leasehold and therefore they might preclude sub-letting or at best there would be a fee for sub-letting.

You have to find a tenant and there are costs associated with this. Who is going to deal with issues when they arise as they most assuredly will do.

Don't assume that older tenants will look after your property any better than any other group. You also have to collect the rent.

As with all letting there will always be void periods.

There will also always be internal maintenance issues.

Many retirement home operators seem to cut corners in the ongoing maintenance - just as we know some timeshare operators do - to keep charges low to appear attractive. Of course we all know this is very shortsighted as a place can become shabby. Occupiers or their relatives are not fools and they will tend to move to the best run places operated by the known most-professionally run outfits. This creates a risk for the investor.

Last, retirement property can go up in value but it can just as easily go down in value - see the track record for other properties per your rightmove links.

If letting retirement property was such a safe bet the values of such properties would be far more stable, particularly in a world of low interest rates.

As I have just stated elsewhere, all assets are pretty much now priced to the max due to low interest rates and relatively easy money sloshing around chasing yield while not necessarily considering the risks.

IMHO this presents precious little upside from here, particularly in property, where we are so late in the day in the cycle. This implies that the best way forward, as an investor, is to locate property that will benefit from some sort of new frontier such as a CrossRail station, better infrastructure coming on stream, better transport links in general, a big new enterprise zone for good jobs.

Alternatively take advantage of a crisis sale (break-up, redundancy...) which creates a bargain opportunity if you are there with cash to take advantage from offering a very quick sale. This might make sense of the 'deal'.

mikelincs

There are plenty of property management companies dealing specifically with this type of property, we are in one such rental, leasehold, owned by one group, and rented out by another company, there would seem to be few issues about the sub letting as many of these properties beome owned by people not eligible to live there if/when the owner dies. Unoccupied they still attract the maintenance and ground rent, so most get let out.

Take a look at Girlings, they give all the costs and are a nationwide organisation with properties all over the UK.

Girlings Retirement Rentals Ltd | Retirement Properties for Rent | Homepage

There is an area on their website for landlords. We have rented from them for years and have never had problems.

Pistolpete2

Check this detail from rightmove and decide whether you think that investing in retirement property is a stable investment from a preservation of capital perspective:

House Prices in CT1 2AB

Flat 29 is not a pretty picture for an investor, nor is 13, nor is.....

Homespire House is Girlings, BTW.

I had looked at this development myself a few years back for a relative to live in but the price variations for similar properties put me off due to their instability. I also noticed that Girlings buy the properties back to create a market but at a price.

mikelincs

Girlings will buy a property so they can either sell it on or put it in for rent. Many of the properties are 'forced' sales as the owner has to go into a care home, and to fund this they often have to sell their home, there is one property up for sale at the moment here for that reason. The owner is in a care home costing around £2000 a month. we also have one person here requiring 24 hour care however this is a retirement property, and there is only a part time manager, so they are going to have to get live-in carers costing £1200 a week. With these costs money soon disappears, and eventually she will have to go into a home with full time care, so her home will have to be sold.

mikelincs

They may not be 'pretty pictures' but remember that these places are designed for single people or couples, and have, usually, small kitchens, are single bedroom places with a throught lounge often with the kitchen a small area through an archway just big enough for a cooker, fridge and a few cupboards and a small work surface. We have moved several times before finding a place with a decent, separate kitchen, good sized bedroom and lounge. Most of the places have a laundry room and all have a communal lounge and usually a guest room for visitors. Guest rooms cost visitors the huge sum of between £10 and £20 a night for a couple. In those with a laundry room there are no water or sewerage rates, so are attractive to renters.

Pistolpete2

Well indeed those are the realities for many retirement home owners but those and other issues create some sort of liquidity in terms of availability (turnover) in the market and the results in terms of achieved prices are there for us all to see and they are not a pretty picture, in many cases.

not2old

in view of those last two comments, given an aging population, could being the slumlord of 'retirement properties' be a smart investment?

The likes of Girlings certainly are in it for the love of money.

I have spoke to two agents for ones in Southport who inform me that owners can lease them out & that its starting to take interest from individuals not just investment groups or management companies.

Could be a 'squeeze the old buggers to sell low, or beat them up' to get an investment with with a decent ROI

Just saying .....

Perth

Mike do you pay council tax?

not2old

council tax unless exempt is paid by the tenant

FAQ's

Girlings Retirement Rentals Ltd | Tenants FAQ