This care home has a town centre location that places it near local shops and public transport within Newport, Wales. The location combines pleasant surroundings with easy access to the M4 motorway, making it ideal for families looking for accommodation where it is easy to visit residents.
The home comprises 49 rooms over two storeys in a converted period property. Operational for 25 years, the home is fully staffed and operational with a focus on physiotherapy and palliative treatment, as well as cancer care, Down Syndrome and Huntington’s Disease – a specialism that will strengthen its appeal to potential residents.
The facility offers en-suite rooms, with telephones, TVs and a nurse call system, as well as a hair salon and visiting chiropodist and physiotherapist. Rooms are fully furnished, but residents are encouraged to bring personal possessions, with no requirement for investors to furnish the property or maintain it.
Rooms are available for cash purchase from £64,999, a lower price point compared to similar properties. Prices range up to £124,999.
No maintenance or ground rent is required and no stamp duty is payable, which means that investors can earn rental income without additional hidden costs reducing returns over the course of the investment period.
Rental income is assured and increases over time, with the returns tiered to match the price of room purchased. For rooms priced at £79,999, yields are assured at 8% in year 1, rising to 9% in year 2 and 3, then to 10% in year 4 and 5. For rooms priced at £124,999 yields are assured at 9.5% in year 1, rising to 10% in years 2 to 5.
The property is fully managed, ensuring fully hands-off income. This is paid in advance to the investor’s bank account every quarter.
Investors can sell the room at any point on the second market themselves or take advantage of a guaranteed buyback from the care home operator to simplify the resale process.
While capital growth prospects are minimal for this asset class, the buyback amplifies overall ROI. Buyback options start at 109% in year 3 and rising to 115% in year 5, 123% in year 9, 130% in year 15, and 140% in year 20. Five Quadrant’s financial illustration calculates a total ROI of 168% over 15 years.