With the promise of 8% returns could a care home investment be a BTL alternative?

11th October 2018

Article by Samantha Downes, whatinvestment.co.uk.

Investors are being encouraged to consider investing in care homes as an alternative to buy-to-let.

HyLife, an alternative investment company, is offering investors with £65,000 or more fixed returns of 8% over one to three years.

Its product Care Home Suites pays a monthly or quarterly return and as its name suggests the investor effectively buys a care home suite, which the investor owns on a 250 year lease basis.

The investors gets full title deeds to the apartment, which is run by RB Care Homes.They have the option to exit the investment after one or three years.

Lauren Warlow, director of HyLife said: “The need for care homes is only going to grow as we live longer. In many ways this is an alternative to buy to let. There is not the same kind of outlay plus you I have the flexibility to exit within one to three years as a lot can change in that time.”

“The UK population is getting older, with the over 85 age group now the fastest growing age demographic in the UK. This investment combined with high returns, no running costs and no stamp duty is in many ways a more useful form of property investment.

”What Investment’s view:

“This is an unregulated investment and investors are relying on RB Care Homes to keep paying those returns; whether the room is occupied or not should be irrelevant; therefore it is an investment in the start up rather than a property (or even BTL alternative) investment, it is an investment into the care home company which has not yet filed accounts.

“Investors need to ask themselves whether they have the appetite for investing in a new start up company with no accounts and no track record. If they do have the appetite, they might also want to look at the more tax efficient VCTs or EIS.”

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