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.
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 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.