High Yield Property Investments
The types of property investments under consideration here range from fixed interest loan notes issued by UK property developers through fixed term Buy to Rent investments in managed establishments such as residential Care Homes and Hotel rooms, to property developed specifically for Student accommodation.
Investment is usually in the range £25k to£75k for single units and due to the managed structure of this type of investment the investor is entirely hands free which will have obvious benefits to UK Ex-pats and other investors living overseas who want to diversify their investment portfolios while not having to keep a daily watch on their investments progress.
These types of investment are generally offered as fixed term investments or are set out with a series of forward exit dates giving the investor a number of options on when to withdraw their capital. Yields can be high, often in the range of 10% or higher and there is often scope for capital growth over the period the investment is held.
High yielding Loan Notes issued by Property Developers
Loan notes are often issued by property developers as their preferred way of obtaining capital for their planned developments without having to go through the lengthy and uncertain procedures that are required by commercial banks. Issuing Lone Notes puts the developer in direct contact with investors simplifying the funding process and providing the developer with a speedier and more certain route to getting their development project started.
In return for this financial assistance, the developer is often willing to offer high rates of return on the capital that investors lend to them which can make this form of investment highly attractive to those investors who are holding spare cash reserves and have the right level of investment experience to properly evaluate the risks.
- Interest rates of between 5% to 12% are common and often further bonuses can apply.
- Interest is usually paid annually or at earlier intervals depending on the conditions of the Loan Note.
- Investors can often withdraw from the loan agreement at annual intervals.
- Investment terms are usually between 2 and 7 years.
High yielding Buy to Rent Care Home Investments
Private investment into the care home buy to rent market is a fairly recent concept and one which is considered to be the future way forward in providing sufficient care home places to meet the country’s ageing population needs. Future growth predictions for the UK’s ageing population viewed against the lack of UK government funding for care facilities in general, indicates that this type of private investment will become essential if future care demand is to be met.
Typically with this type of investment, what you are doing is purchasing, for a set period or range of periods, a unit within a new build or existing care home where the care home may already be fully operating or soon to be operating under the care home operators management.
These are Buy to Rent investments where the investor is taking ownership of a portion of a care home operating company’s premises and giving the care home operator the full use of your holding in those premises in return for sharing in any income that is produced from your holding.
- Yields of between 8% and 10% are common.
- Income is usually paid annually or at earlier intervals depending on the conditions of your specific contract.
- Your contract will generally set out a range of dates where you can withdraw from your investment.
- Where you have invested in a well run care home you may see capital growth on your investment at the time you withdraw.
- Investors have no involvement in management.
High yielding Buy to Rent Hotel Room Investments
This type of investment operates in a very similar way to what has been described for Care homes except that the investment is in a different market sector making it perhaps a bit more specialised as it has a wider market approach.
As with Care Homes, you are really taking ownership of a room within an Hotel and then lending that room back to the hotel operator in return for sharing in any income the Hotel produces that room.
Yields will generally be in the range 8% to 10% per annum but in practice will be reflective of how well the Hotel is operated and as with Care home investment, there is scope for capital growth if the hotel does well. The investor also benefits from being relieved from having to manage the day to day running of the property as that is all taken care of by the Hotel operator.
High yielding Buy to Rent Student Accommodation Investment
Over the past few years there has been a trend away from this approach with investors turning their attention to Purpose Build Student Accommodation (PBSA) opportunities where the investor only purchases a room or rooms in managed establishments.
This type of investment operates in a very similar way to what was described for the other high yielding investments where the investor is really taking ownership of part of a student accommodation facility and renting that portion back to the operator in return for an agreed return on your holding.
Yields will generally be in the range 8% to 10% per annum but in practice will be reflective on how well the operator managed the business. As with the other types of investment shown here, the investor is relieved from any management responsibility of the unit while holding the investment.
Investor suitability for these types of Property investments
Although these types of investments can produce high returns and will free up the investors time through there being no requirement for their active participation in the activity the investment is being used for, they do carry risk. This risk means that investors need to fully understand that should the investment issuing company become insolvent, or if it under performs in its chosen market area, the capital that was invested may not be fully returned or may even be lost. For these reasons, investors who have limited experience with this type of investment should seek advice from professional financial and legal advisers, to ensure that the specific terms and conditions associated with the investment and the possible outcomes for the investment, good and bad, are fully understood prior to making an application.
As you are investing in a commercial enterprise, there are no government protection guarantees available and these types of investment are not regulated by the Financial Conduct Authority.
High Yield investments currently available
- 7 Year Loan Note - 12% yield plus bonuses.
High annual yield of 12% per annum in the first year, rising in stages to 22% per annum in year 7, if held for full term. This loan note is for property development and will be secured against the property developers total assets. For more information about this product click here
- Emerald Court Care Home - 42 Bed Care Home investment up to 10% yield
- GLAN-YR-AFON - 39 bed Care home investment up to 10% yield