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Shanklin Care Community gives investors an opportunity 10% rental returns in the care home investment sector

28th April 2017 Print

Shanklin Care Community is perfectly located on the Isle of Wight, in a seaside resort that has been popular for many decades. The development consists of three floors with 26 units located on the second and third floor where stunning single and double ensuite units can be found.  Ten of the units will have access to balconies that have plenty of sunshine and views of the beach and sea.  On the ground floor, residents will have access to stylish communal areas that encourage everything from socialising to relaxing and fine-dining.

The development will experience a complete overhaul as the internal areas will be redesigned and refurbished to an extremely high standard as quality furnishings will be used along with print, fabrics and accessories. The units are designed for people who are at a later stage of their life and so, the furnishings are designed to offer an energetic feel.

Investors now have the ability to purchase the leasehold of individual care studios as part of the development portfolio, with the units being offered at a discount rate. Once an investment has been made, the developer will then lease the units back to the investor at a cost that equates to 10% net for ten years.

Once a resident has been found for your care studio, it will then be purchased back from the investor for 10% net premium of the initial investment providing investors with a solid return their investment. As an aside to this, there is also a 110% buy back option from exchange or in year ten, there is a 125% buy back option if the unit has not been sold by this point.

Upon completion of the work, each unit is then marketed again both online and offline while being run by a care service business that has a vast amount of experience as well as 5 star care home management experience. The way in which the development will be furnished and finished to a high standard, the units will be classed as a high-level care accommodation in the area. They will then be aimed at wealthy individuals and couples who will have the option to lease or purchase their care studio.

What Options are there for Investors?

Investors have the ability to purchase the leasehold of the care home investment individually at a price that is 30% less than the full price. Once the work is completed investors then have three options:

The first option enables the investor to become the landlord where they will receive a rental income that is determined by the value of the studio. There will also be a 3% cashback from the developer when completion takes place to help cover the period while refurbishment work takes place. Once the studio is occupied the rental income will be paid.

The second option is based around a managed service where investors will receive a 10% fixed monthly income through a lease management company. This will provide the investor with a protected income even when the studio is not occupied while they will still receive the 3% developer cashback which is paid when refurbishment works take place. A one-off fee will be paid to the managing agent which is a total of 25% of the complete annual rent in order to cover fees such as legal fees, admin and management fees.

The final option makes it possible for the investor to self-occupy the studio but they will pay the full price but it can then be used by themselves or by a family member. 

It is possible for investors to flick between these options when they choose.

The three studios available are the Luxury Care Studio which is 31 square metres, has one bedroom and is valued at £171,500. The Deluxe Care Studio is 24 square metres, has one bedroom and is valued at £99,400 while the Care Studio is 17 square metres and also has one bedroom and is valued at £85,400.

For more information on Shanklin Care Community, please contact Hopwood House.