5 Alternative Property Investments

29 Nov

5 Alternative Property Investments

The search for income is becoming ever more interesting, as many investors turn to alternative ideas. Houses and apartments are considered traditional, but there are several hands-free, low-entry, high-yielding, long-term property investments that are a little different.

Here are 5 of the most popular alternative property investments:

Hotel Rooms

It may have crossed your mind at one point or another, that a hotel or B&B would make a good investment. Only to be deterred by the cost of such a venture.

Investing in a hotel room is a means of fulfilling your ambition at a fraction of the price of owning the entire establishment. The hotel management maintains the room, and for doing so, takes a small percentage of the profit. Whilst the rest of the income earnt from a stream of short-term tenants is yours.

The UK hotel industry has shown consistent growth, and occupancy rates are at record levels, with room yields rising annually.

Purpose-Built Student Accommodation

There are over 2 million students in higher education across the UK, and the purpose-built accommodation market is worth around £46 billion.

Despite government policy to raise tuition fees and abolish maintenance grants, the number of university students continues to rise year-on-year. The UK’s vote to leave the European Union also failed to deter prospective students, with overseas applications to British universities increasing by 2.2% since 2016.

With demand for student accommodation at an all-time high, around one fifth of students are prepared to pay more than £160 per week if they are impressed. Purpose-built accommodation grants tenants’ access to communal amenities, such as: launderettes, gyms, bars, cafes, and a concierge service. Rooms are well-equipped with multiple plug points and good furnishings. All of which prove attractive to students.

Care Homes

People across the world are living longer, and the UK population is no different, with the number of over-65s expected to rise from 17% to 23.6% by 2035.

Care homes are usually at the centre of picturesque, tranquil locations; where people can enjoy their surroundings and a slower pace. Residents have a superb quality of life, as: care is always on hands, there are often events, and the social environment combats loneliness.

Investing in care homes has some unique benefits. Usually, the lease is flexible and can be passed onto other family members, if ever there was a need to do so. Wear and tear are extremely limited, which means it can maintain and appreciate. At up to 10% per annum, care home investment provides steady income generation in a consistent market.

Nurseries

Foreign investors are continuously seeking out premium British nurseries, as an income source.

Worth around £5 billion to the UK economy, the nursery industry is thriving. More families in work than ever before and substantial immigration, means that demand for places has surged despite economic uncertainties of the last decade.

The nursery and wider childcare industries receive significant financial backing from the Government, mainly in the form of vouchers.

Another attraction for investors is that high-street banks are also, now improving lending policies towards the childcare sector.

Car Parks

Motor organisations predict there will be up to 39 million more vehicles on UK roads by 2030, and the need for parking is expected to dramatically increase. Urban areas are only equipped with limited spaces for car parks, and demand is set to suitably outstrip supply.

Essentially, investors can take advantage of this idea by purchasing an individual parking space and letting it out to a tenant-usually a management company-who, in turn, sublet it to customers.

Parking spaces can usually be purchased with a minimum investment of £25000 for a 6-year lease, with most opportunities offering rental yields of 8% over the first 2 years.

 

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