Nursing home property as an investment

Zuletzt aktualisiert am 27.04.2022

Care properties have really become fashionable in recent years. But why are more and more people investing in this type of property as a capital investment? One of the main reasons: The capital investment risk is relatively low with long-term care real estate.
Let's take a closer look at this type of investment.

What is a care property?

The investment in nursing care real estate is not necessarily about acquiring a complete nursing or retirement home. Rather, this concept aims to buy individual flats of a care facility. This also includes, for example, facilities for assisted living.

What is a care propertyThe big difference to usual residential real estate lies in the contractual partner. In the case of care real estate, a rental contract is concluded with the operator of the facility and not with the resident of the flat.

A nursing home property as an investment is therefore perfect for investors who want to have little effort with their property. As a rule, the operator of the care facility takes care of the tasks involved.

Why invest in care real estate?

Buying care real estate - a good idea? There are many good reasons for investing in nursing care real estate.

At this point, we would like to focus on one reason in particular:
Statistically, people are getting older and older and a significant increase in the number of people in need of care is expected in the coming decades. Investing in care real estate/care properties will therefore continue to increase in the future and can therefore be a wise investment.

Of course, there are also risks with nursing homes as an investment and you must decide for yourself whether it is better to buy a flat or a nursing home as an investment.

Care property investment Example calculation for a property in Baden-Württemberg

Purchase price203.239,00 EUR
Land transfer tax (5%)10.161,95 EUR
Notary and land register costs (2%)4.064,78 EUR
Total investment217.465,73 EUR
  Net rental income per sqm11,90 EUR
  Net rental income per month626,65 EUR
  Total annual rental income7.519,80 EUR
Interest rate loan (at 1.20%)2.438,87 EUR
Maintenance reserve (p.a.)158,00 EUR
WEG administration (p.a.)360,00 EUR
Surplus before redemption and tax4.562,93 EUR
Redemption (=asset accumulation)4.064,78 EUR
Return after redemption (p.a.)498,15 EUR
Monthly income after property ownership and asset accumulation41,51 EUR

The example object listed here serves as an illustration. Please feel free to contact us for similar objects. 

Crisis-proof investment Nursing home property: protection against inflation

Care property and inflation

Care property and inflation

Why is a care property crisis-proof? Well, as we have already explained above, the number of people in need of care will continue to rise. And this will happen regardless of the course of the economy and the development of the stock market. Care real estate will always be needed and thus defy any crisis.

Des Weiteren bieten Pflegeimmobilien einen guten Inflationsschutz. Und dieser ist gerade jetzt wichtig. Die Covid-19-Pandemie hat eine weltweite Krise ausgelöst. Die Europäische Zentralbank (EZB) reagiert darauf mit umfangreichen Finanzspritzen für Länder und Unternehmen. Diese rasante Geldflut birgt ein hohes Risiko für eine Inflation, was bedeutet, dass die Kaufkraft des Geldes abnimmt und Ihr Geld somit immer weniger wert ist. Ein guter Grund für eine Investition in Sachwerte. Gerade dann stehen Sachwerte hoch im Kurs, da diese einen „eingebauten“ Inflationsschutz aufweisen.

Does it make sense to buy a care home?

Investment in nursing care real estate - For many, this sounds strange at first. Are investments in nursing homes serious? Ultimately, it is up to you to decide whether investing in nursing care real estate is recommendable. We would like to show you the most important advantages and disadvantages here.

Test now:
Does real estate as an investment suit you?

Care property Advantages:

  • When you rent out your care property, you do not conclude the rental contract with the resident, but with the operator of the care facility. The latter pays the rent, regardless of whether the flat is occupied or not. This minimises your risk of loss of rent. It is also minimised by the fact that the operation of a care facility is not dependent on the economy.
  • With the purchase of a care property, your own care place is secured for the future, as you as the buyer have the right to move in yourself. And you don't have to be put on a waiting list first.
  • Since the operator of the facility usually takes care of maintenance, leasing and management himself, you have little to do.
  • Taxdeduction for a care home: A care property is also worthwhile from a tax point of view. You can deduct the financing costs from your taxes and write off both the property and the inventory.

Care property Disadvantages

  • Even though the demand for care places will continue to rise and such a facility is considered crisis-proof, you must not forget the human factor. Therefore, of course, a care property also offers risks. If the care facility is poorly managed, the operator may become insolvent.
  • As with any other property, the economic success of a nursing home property also depends heavily on the location. So here, too, good research must be done and you should not do without professional advice.

Nursing home property as an investment Experience

We have more and more customers who choose nursing homes as an investment and are very satisfied with them. The most important factors here are the operator and the location. If you don't separate the wheat from the chaff here, you will fall flat on your face with your investment in senior citizens/nursing homes or nursing flats.

Would you like to read the testimonials from our customers? Then we ask you to contact us directly. Understandably, our customers do not want reviews to be available online for everyone. However, we are happy to send them to you confidentially with the customer's consent. 

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Care property listed building

Eine denkmalgeschützte Immobilie bietet sehr viele Vorteile. Denkmalschutz Immobilien müssen in den ersten zwölf Jahren abgeschrieben werden, was sich steuerlich sehr positiv auswirkt. In der Regel fallen bei solchen Immobilien Sanierungsarbeiten an, welche vom Staat gefördert werden, wobei Sie günstigere Darlehen und Zuschüsse erhalten.

If you now purchase a care property that is listed, you can benefit greatly from this.

Financing a care home

When the nursing home property is worthwhile for private investors also depends on the financing conditions. To ensure that your return is not eaten up by the financing costs, it is important to get a favourable interest rate. The average nursing home yield is around 3.2 - 3.6 %. We will be happy to assist you in finding suitable financing.

We cooperate with over 300 banks and can get the best possible conditions for you. Of course, we carry out the financing comparison for you completely independently so that you really do get the best loan for your care property.

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