Investing in Retirement Homes in Tamworth – Pros and Cons of

With banks offering minimal returns on your savings, are there savvier ways to invest your money?

For those approaching retirement age, have you considered  investing in a retirement home for your retirement income.

Lots of social activities

Lots of social activities

Benefits of investing in retirement homes

Retirement homes or villages tend to be situated in chocolate box villages or towns which are popular with an older folk, such as Devon.  Here residents can enjoy a slower pace of life with their picturesque surroundings.

More and more people are discovering the benefits of downsizing, after all that big rambling house is no longer required and it’s  too much to maintain.

You may not feel ready to move into a retirement village  yourself, however you may welcome the additional income. So, even if you decide moving into a retirement home is not for you, now or in the future, the rental yield would be most welcome.

Recent research shows that half of all people over the age of 75 live alone, and one in ten of those aged 65 or over say they feel lonely. Half of all older people consider the TV to be their only form of company.

Loneliness can have a impact on one’s health – research has shown that lonely people are twice as likely to develop Alzheimer’s than those who interact with other people.

Retirement homes regularly hold bingo evenings, coffee mornings, day trips to local excursions, they have Wellness Spa & Gym centres, a restaurant and a library. This gives residents the opportunity to socialise with each other as much or as little as they wish, folk are never lonely in a retirement home.

With the UK’s ageing population, there will always be a demand for residential homes/villages. For those of us who are not quite ready to sell up the family home and move into a retirement village, good rental returns are guaranteed. Leases can be flexible  so that they can be passed on to other family members should anything happen to the investor.

The cons of investing in retirement homes

As care homes are limited to the over 55s, there is a smaller pool of potential residents, however with the UK currently having a large elderly population, occupancy levels should be  relatively good.

Charges will be payable as there will be management  company overseeing the daily running of the care home, so this will reduce the rental yield. However, if the property is purely an investment opportunity it could be a completely hands off investment.

So whether you consider a retirement home for yourself or as an investment, why not look into the facts and figures.

As always any thoughts are always welcome, lorraine@hallandthompson.co.uk

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192 Tamworth Households Occupied by OAP Renters

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Tamworth, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Tamworth?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Tamworth at age 65 (years) is 18.4 years for males and 20.7 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Tamworth.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Tamworth?  Of the 7,239 households in Tamworth, whose head of the household is 65 or over, not surprisingly 5,236 of households were owned (72.33%) and 1,631 (22.53%) were in social housing.  However, the figure that fascinated me was the 192 (2.65%) households that were in privately rented properties.

Tenure: Owned; Tenure: Shared ownership (part owned and part rented); Tenure: Rented from council (Local Authority Tenure: Private rented; Tenure: Living rent free;
72.33% 0.26% 22.53% 2.65% 2.22%

Anecdotal evidence, by talking to both my team and other Tamworth property professionals is that this figure is rising.  More and more Tamworth OAP’s are selling their large Tamworth homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Tamworth OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.

Tamworth landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property. Email me  on lorraine@hallandthompson.co.uk or give me a call on 07531484956. We can always meet up for a chat and a coffee, we can even walk the dog.

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