Advice for first-time investors in the care industry

The lucrative market for UK’s healthcare real estate has attracted both domestic and global investors, and the demand for these service providers is projected to rise rapidly with an increasingly ageing society. Here’s a guide to making well-calculated care investments.

Emphasis on multi-faceted wellbeing

For investors keen on alleviating a social challenge and making a fail-safe ethical investment, they should set their sights on care home companies in the UK.   However, it’s quintessential to make sure that a background check is conducted to ensure that the amenities available meet the current requirements of this dynamic market.  For instance, the spenders of the “grey pound”, which accounts for a 300 billion economic contribution from over 18 % of the UK’s population, are increasingly opting for a holistic and person-centric approach to residential care.  The requirement for specialist and one-on-one nursing care for complex conditions have been projected to escalate as, for instance, the number of dementia cases is expected to reach 1.6 million in 2050, with a shortage of  75,000 care beds predicted for 2030.  Despite the unsurpassed demand for assisted living amenities, however, the UK’s affluent elderly look for bespoke care solutions that enable them to enjoy a wholesome and stimulating lifestyle.

A culture of empowerment

According to the Office of National Statistics (ONS), the demographic for seniors over 65-years is expected to reach 20.7% of the UK’s population by 2027. Research also indicates that elderly property-owners are growing more independent regarding their life choices, with their dependency ratio expected to reduce from 4 people supporting retirees to 2.5 by 2035. Many are downsizing their living space, distributing their wealth to family members, and opting for a community-based care haven that respects individuality and values the unique contribution of each resident. Additionally, the best dementia care homes prioritize investing in the wellbeing, competency, and job satisfaction of care staff, which indicates the quality of care received by residents, some of whom may display behavioural disorders that need to be handled with loving patience. 

 Therefore, budding healthcare investors must choose elderly mental health care homes dedicated to celebrating the fulsome lives of their inhabitants.

A reputed pre-existing institution

When investing in a buy-to-let care property, make sure it is fully operational, excellently maintained, and fitted with top-of-the-line facilities.  For instance, when selecting care homes for people with dementia and other complex needs, make sure they achieve outstanding rankings from regulatory bodies like the CQC and CWS while also following an evidence-based multidimensional care system like QIPP (Quality, Innovation, Productivity, & Prevention). Unlike traditional buy-to-let properties, purchasing care rooms don’t come with the burden of stamp duty tax (exempting rentals over £15,000), and “landlord costs” for maintenance, damages, and ground rent are the responsibility of the care operators, making this a completely hands-free enterprise.

Competitive investor benefits

The hallmark of an investor-friendly bespoke care service provider is maintaining high care standards, for instance, care homes with “Good” or “Outstanding” CQC rankings often perform better with profit margins of over 30%.  In addition to an annual NET return of 10% and a variety of room investment options to choose from, the perks for purchasers should include guaranteed buy-back schemes, clear-cut exit strategy avenues, purpose-built amenities that will only add value for the investment.

Prioritize data-driven collaborations

The phrase “it takes a village” also applies to enhancing care processes, as it requires a system-wide approach with engagement from different industrial players, from hospitals and social care commissioners to pharmacies and national authorities like the VCSE. Therefore, along with a highly qualified team of in-house specialists, such as a CQC Management Executive and Medical Support Board, investors must make certain that the care home has an excellent rapport with visiting professionals and the community at large.

A favourable approach to technology is also quintessential; for instance, a centralized database to lift the burden of repetitive tasks from the care staff so that they can focus more on building meaningful relationships with residents.

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