Alternative buy-to-lets are a lucrative investment opportunity especially when compared to the declining traditional buy-to-let market. As the traditional BTL revenue is diminishing investors have started to move away from buying conventional property and renting it out, this was mainly caused by changes in tax which are affecting investors’ return on investments. HyLife has spotted this drastic market change and in turn introduced a number of creative and calculated investment opportunities to profit from the booming alternative buy-to-let-market.
According to Property Partner, rent prices are falling 0.6% year-on-year causing investors to reconsider their commitment to the traditional property market. The decrease in rental income coupled with the failing pension schemes have made alternative buy-to-let investments a super savvy solution for maximising savings.
There are four main alternative buy-to-let opportunities available to investors:
Care home investments are considered to be one of the most lucrative opportunities for investors seeking high yields and a stable long term investment.
Local Authorities pay privately owned care homes to provide care for those that qualify for financial support as it is more cost effective than providing the care themselves. The majority of care homes are now privately rather than publicly owned and it is here that the opportunity lies.
Investors purchase a suite within a privately owned care home on a leasehold basis, similar to a buy-to-let apartment, and lease their unit/s back to the registered care home provider who manages the care home on the investors’ behalf. Investors will earn up to 10% NET P.A and benefit from buy-back options with capital growth throughout their ownership. This type of alternative investment is completely hassle-free as everything from maintenance to management is handled by the operators and their onsite team at no additional cost to the investor.
Buying a care home suite is an ethical decision as the additional investment into the care sector helps to provide more beds and improve the quality of the care available to the UK’s ageing population.
Hotel rooms are alternative investments that allow you to invest in the growing hotel industry for only a fraction of the cost of a whole hotel. Investors are offered the opportunity to buy hotel rooms on a leasehold basis and lease their room back to the hotel operator to manage on their behalf. With the multi-billion pound industry having grown by 5% in hotel room occupants this year alone, we can expect to see an even more significant rise in demand within the coming years. By investing in individual hotel rooms, investors can expect to see up to 10% net yield assurance over 5 years and excellent buy-back options. Hotel rooms are a great source of passive, hands-free income for the savvy alternative investor.
Holiday homes are a highly recommended alternative buy-to-let investment. This type of investment is particularly popular as an alternative to the currently failing pension schemes, providing a more assured and lucrative means of making money and saving. This opportunity offers investors the chance to invest in a furnished holiday let that is completely managed by the operator resulting in a hassle-free investment with regular income payments.
In 2017 alone, the assessed spend on staycation in the United Kingdom was calculated to be around £23 billion, a figure that keeps growing. When also considering the power of the pound dropping the UK is cementing its place as an attractive holiday destination worldwide.
For a property to be listed as a Furnished Holiday Let (FHL) it must be advertised for rent for 210 days per year but only needs to be occupied for 106 of those days. This offers a very flexible investment option with high control over the property and doubles up as a lifestyle investment, if you choose to use the property for personal use. Holiday homes not only attract high returns but also have significant tax benefits when compared to traditional BTL property.
Student property investment is another high yielding investment that has high demand and a growing market, thus providing a fruitful investment opportunity. Student property allows the investor to purchase single rooms in student accommodation. Similar to nursing home investments, the demand has overtaken the supply drastically with universities no longer being able to house all their students. The student population in the UK is now at 2.4 million, a figure that is set to keep growing. Investors can expect a hands-free investment with 7-9% in returns P.A.