Care Home Investment VS Hotel Room Investment – The Verdict

As one of the UK’s leading introducers of property-based investments with a solid 5 years in business, we certainly have what it takes to identify market leading investment opportunities.

We are going to share our views and thoughts on both the care home investment market, as well as the hotel room investment sector with you our clients and prospective clients.

Both care home investments and hotel room investments are attracting hundreds of millions of pounds each and every year from investors seeking above average yields. Both, as a vehicle for investment, are similar in the sense that an investor will invest in a room within a building and earn income, based on someone renting the space, both investments come with a title deed and are often of a similar rate of return.

Hotel Room Investment

The sector has done tremendously well in the last decade or so, since we have been in and around identifying investment opportunities, there have always been hotel room investments as an option for our investors.

Investors will purchase a room in a hotel and receive a title deed.

The investor will then earn a share of the revenue generated from people paying to stay in the room, the investor will be completely hands-off in the sense that there will be a management company in place to operate the hotel / advertise the room.

Hotel room investments have typically done well over the years, it is very much demand based and so long as the economy is doing well, there tends to be demand from people going away and needing somewhere to stay.

Hotel Room Investment

Hotel Room Investment

Care Home Investment

We have recently cast our eyes towards this hot area of the property market. Care homes have been around for as long as property has been sought after, there is a real high demand from property investors seeking stable and more longer-term property investments. We have looked at care home investments and have been pleasantly surprised by the quality of the underlying asset and the numbers really stack up for investment.

Investors are purchasing a care suite within a care home and they in turn are receiving a title deed. The investor will then earn a share of the income generated from someone renting the room, there will be no involvement whatsoever from the investor, as the care provider will come in and take control of every aspect of providing a very high standard of service in accordance with the Care Quality Commission (CQC).

We believe care home investments to be a solid option for an investor seeking a stable return over a longer period of time with excellent returns.

Care Home Investment

Care Home Investment

Care Home Investment VS Hotel Room Investment – The Verdict

Both are quality assets that investors should be considering as a suitable acquisition for an investment portfolio. Both will offer similar returns and are very much of a similar price, both also come with title deeds and are certainly very similar by nature of what they are and what they do.

There is one major difference in the sense that, a typical care home will be 20 to 30 rooms, where as a typical hotel might have say 100 rooms.

In addition, the occupancy of a hotel room might be on average 2 to 4 days, whereas the occupancy of a care home is typically 3 years.

Another factor with regards to the 3-year average occupancy for the care homes, the better the level of care, the better the level of care home, naturally helps one to live longer which possibly ensures an even higher occupancy level than the 3 year mark.

It is pretty easy therefore to draw conclusions, both are high yielding, and both offer a lucrative package for an investor, but, from an occupancy standpoint – the care home investment is the clear winner in our opinion.

FJP Investment is a leading provider of UK and Overseas property investments.

We have a solid track record of delivering high quality investments to our global audience of investors, to find out more about our care home investments, click here.


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Site Visit – Carlauren Group Care Home Investment

We love going on our site visits to meet with our partners and developers and most importantly, we love to tell the story to our investors. What ultimately makes FJP Investment successful and we get told this time and time again, is that we get up and out of the office and go to see our client’s investments and how they are progressing, we then come back to the office with a plethora of photos and videos and a story to tell.

With our investors investing in our Care Home investments from all over the world, it is not always possible to come and see for yourself and therefore rely on us making regular check-ins with the Carlauren Group and thus providing our investors with timely updates.

We get it. We understand what it means for an investor to receive photo updates and we will be sure to continue this and with every site visit, we become better at telling you the story.

June 4th, 2018, we went to Yeovil for a few days to meet with a client who had just arrived from Saudi Arabia. We were taking him on a site visit, the timing of the site visit was actually very good as we had 3 care homes within a good 20-minute drive to showcase:

Hurst Martock – 13 minute drive from Carlauren Group Head office.
Status: Construction well underway – a good 50 or so builders on site and several weeks away from completion.

Latimer Lodge – 7 minute drive from Carlauren Group Head office.
Status: Completed and fully occupied.

Tynedale House – 7 minute drive from Carlauren Group Head Office.
Status: Completed a few days before we arrived and guests arriving in the coming weeks.

On this particular site visit we were able to see a care home under construction, a completed construction and of course a care home fully occupied. This was really valuable for both us and our client, as we could see what a care home investment looks like at all stages.

State Funded Care Homes

Any one who thinks of a care home, or has visited a care home will have the vision of boring colours and lots of residents sitting on old chairs in one big room. Government funded care homes are in big trouble, with the UK Government funding care for those who need it, that is ultimately the reason why those in Government funded care homes, are getting a poor service.

If you have been assessed as needing a care home place and your capital is below £23,250, you should be entitled to financial support from your local authority. This typically works out as £450 a week being paid by the Government to the care home.

Carlauren Group Care Homes

Luxury en-suite care studios with professional care and support on hand 24 hours a day. Residents benefit from the finest furnishings, fabrics and fittings. I think, what makes Carlauren Group exceptional is that they hire the best of the best. For example, the chef at Latimer Lodge is an award winning chef. All of the biscuits are baked in-house, all of the meals are freshly prepared using the finest ingredients. Fine dining is on offer with companionship from all of the other residents, Latimer Lodge even has a hair and beauty salon on site and a Bentley for the residents to be chauffeured around town.

The key to understand what the Carlauren Group are doing – they are offering a 5-star level of care to those who want to pay for it.

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The Numbers – Care Home Investment

The average life expectancy of someone in a care home is typically 3 years.

More than 80% of citizens in the United Kingdom aged 75 and above own a property. The wealth amongst those aged 75 and above is significant with many owning second properties, stock and shares, bonds and saving accounts.

The price per week in Latimer Lodge is around £1,300.

3 years = 156 weeks

£1,300 x 156 = £202,000

If you can imagine the average cost being put at £202,000 from the estate, for a very high quality end of life service, it is easy to understand why this is an attractive proposition for those who demand the very best.

As far an investor is concerned, he/she will see how the yield is more than easily obtained. I think another interesting point that my colleague makes, when you go into a care home, you go in and you stay in. Which means the turnover of guest within your room is very low. Whereas if you as an investor was looking at a hotel room investment, not only does it pay the same rate of return as a care home – but it also has a high turnover of guests staying 1 night to 3 nights on average.

The overall feeling and thoughts from seeing the latest status of the developments from the Carlauren Group is that we feel proud and privileged to have identified a developer whom is delivering a quality product with sustainable yields and an excellent service to the residents.

The Carlauren Group have at the time of writing this article around 15 care homes. The jewel in the crown is Windlestone Hall in County Durham, we still have some availability and if you are wanting to see the details, we encourage you to make contact and register your interest today.

Windlestone Hall was built in 1830 and was the grandest stately home of its time, the birthplace of Sir Anthony Eden who was the UK prime minister in 1955. The Carlauren Group have a grand plan of renovating this property and breathing fresh life into a beautiful estate of apartments and cottages for the retirement community. Planning permission has been granted to build an underground health club and spa with a gym and swimming pool.

Windlestone Hall is a stunning building and it is very easy to understand why someone with class will yearn to live out their latter years in such an incredible environment.

The head chef at Latimer Lodge is Mathieu Eke, he worked for Antony Worrall Thompson at the famous 190 Queens Gate in London and then went on to work in the Michelin Starred restraint at Castle Hotel in Taunton.

The standard of nutrition is extremely high, and residents enjoy premium fine dining on a daily basis. The best news of all, is that family members are welcome to join their loved ones for meals.

As far as transforming a property, it has typically taken 4 to 6 weeks, though every property is unique, and some require more time than others. The Carlauren Group are operating an impressive number of properties across England. What impressed us most of all is that the Carlauren Group are bringing everything in-house and creating synergies between the various services that are on offer.

Technology is a big part of the strategy for the Carlauren Group. Family members are able to access an app and get a snap shot of what their family member is doing, what they are eating and also read reports written by staff. The application manages everything in one place, such as food allergies, dietary plans and offers real time reporting and feedback.

Going forward, there is a big opportunity that the Carlauren Group are about to take advantage of, they are creating an application which will be rolled out throughout the United Kingdom with a focus on centralising available rooms for those seeking respite care.

Respite care is planned or emergency temporary care provided to caregivers of an adult. The care provider for example, needs a break and is going on holiday but her / his father is unwell to go along, she or he will then ring round care homes looking for available beds. This application will be a bit like booking.com or Skyscanner in the sense that it will showcase all of the available beds, services, reviews, photos and carers will be able to check their loved ones in just like you would with a hotel. Revolutionary and forward thinking and very much pleasing to see!

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Care Home Investment Opportunity

The Carlauren Group is in the business of acquiring and renovating care accommodation in affluent locations on behalf of property investors.

The number of people reaching retirement age is growing and will continue to grow at unprecedented rates for a good while yet. New facilities are needed, and the quality of the product must improve throughout the United Kingdom because expectations are increasing.

Rob Fielder is the executive director care and support at the Carlauren Group. He was previously an inspector for the Care Quality Commission (CQC) and his job would be to go in and inspect care homes throughout the UK so very much qualified in his field.

Investing in a care home studio is a really good method to generate long term income. By taking option 2, (there are 3 options with this investment) you will receive a monthly income from your care studio equivalent to 10% per annum. The property comes with a title deed registered in your name at the land registry.

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