Mainstream property investors tend to stick to owner occupied properties, buy to let, commercial buildings and property development. In reality there is more than enough variation across these types of investment to accommodate any risk profile and investment figure. However, over the years we have seen a number of alternative property investment ideas.
Care home investments
Recently there has been a growing trend towards care home investments with investors offered a share of income from a care home room assigned to them. Many of these schemes offer a form of assured income with capital repayment after a set period of time. As the UK population continues to age, with state care home facilities stretched to the limit, the private care home sector is set to grow significantly.
Hotel room investments
The idea of investing in a hotel room has been around for some time and proven to be lucrative for many investors. When acquiring a hotel room you will receive a share of income generated, with schemes often offering a form of assured income and capital repayment. Like care home investments, location will be key because the higher the occupancy rates the greater the income. It is also advisable to check on management fees and maintenance costs.
Car park investments
While it would depend on the type of car park, management and maintenance costs, there is potentially significant income to be made from car park investments. In years gone by, entrepreneurial property investors acquired leases on old railway arches using them to offer car parking services. The fact many of these were located in city centres, such as Manchester for example, ensured demand for car parking grew each year creating significant returns for early investors. There are many car park investment opportunities today offering assured income and repayment of capital.
Such is demand for car parking spaces in towns and cities across the country that many people are quite happy to lease from third parties. Even with the UK government attempting to reduce congestion in some of the U.K.’s larger cities, the number of cars on the road is still expected to rise for many years to come. As a consequence, the value of car parking spaces is likely to increase in value – there may even be additional opportunities with electric car charging spaces in the future. One note of caution, regulations such as the London congestion charge may have an impact upon the value and income from parking space investments.
Shared investment with housing associations
In an effort to increase the number of first-time buyers we have seen the emergence of an array of housing associations across the UK. Many will offer the opportunity for first-time buyers to acquire a share in their first home with the housing association also investing. While there will be an opportunity to increase housing equity via a partial or total acquisition of the housing association share, there is a drawback. The value of the housing association share of a home would be based on the current market value, so if the value of your property increases then the cost of buying out the housing association will follow.
While the vast majority of property investors tend to focus on more traditional investment assets, the property market has always prompted innovation and an array of different investment ideas. The ability to acquire rooms in care homes or hotels, a share of a car park or parking spaces and even shared ownership with housing associations can prove lucrative. For some investors these alternatives offer an opportunity for diversification of their property assets. However, before investing in non-traditional property assets it is advisable to do your research so you know exactly what to expect.
Contact FJP Investment for details of alternative investment opportunities for you.