Torrevieja (Alicante, Spain)
Price: 25,000,000€ New price: 12,500,000€
Build size: 16,000m²
Type of property: Retirement complex.
Mazarron (Murcia-Costa Calida, Spain)
Price: 15,000,000€ New price: 8,500,000€
Build size: 17,250m²
Type of property: Retirement complex.
Algarve (Algarve, Portugal)
Price: 1,000,000€ New price: 750,000€
Type of property: Retirement complex.
The senior housing and care sector is generating buzz, with more real estate investors hopping on board. According to the PwC’s Emerging Trends in Real Estate 2019 Report, investing in senior housing is, once again, one of the best bets for real estate investment and development for the coming year.
According to the survey, investors are now more interested in independent living units, assisted living facilities, nursing homes, and long-term care facilities. These senior housing real estate properties present profitable investment opportunities for investors in 2020.
A recent CBRE U.S. Seniors Housing & Care Investor Survey and Trends Report further supports this, providing data which indicates that 19% of survey respondents said they already had some type of investment in this sector. In addition, another 20% of respondents said they were interested in investing in senior housing in the future. The fact that almost two-thirds of property investors surveyed have interest in the senior housing and care sector says a lot about the current and future market. There are several key factors and trends that have contributed to this increased interest. Moreover, several forecasters predict that the senior housing market will continue to grow and expand.Contact us for more information
#1 Baby Boomers Driving the Demand
It’s no secret that senior housing properties are in high demand as the number of Baby Boomers entering retirement is growing daily. As the largest demographic of Europeans, these Baby Boomers will be in need of care and housing supply in the decades to come. According to a senior trusted advisor for property investors in the senior housing marketplace, the number of Europeans 65 and older will hit 59 million by 2035 as the Baby Boomer generation ages. This massive demographic continues to drive great demand for senior real estate properties.
A typical senior housing resident is estimated to be 75+ years of age.
The inventory of senior real estate properties is relatively old – 58% of the stock is more than 17 years old and 32% is older than 25 years. As these real estate properties age, they often become outdated as care amenities improve, tastes change, and new regulations advance. Moreover, despite the growth in the senior population, new supply and construction of senior housing properties have not been keeping pace over the last ten years, which represent challenges for real estate investors thinking of investing in senior housing.
However, reports suggest that new senior housing development is on the rise. In fact, according to the Emerging Trends Report, senior housing is the top prospect for development of residential properties and the 3rd prospect for development in the commercial and multifamily properties for 2020!
Moreover, as independent living and assisted living communities have become a more popular choice for senior residents, the majority of new development has occurred in these property sectors. As more senior housing residents (and property investors who want to start investing in senior housing) are demanding new supply with high expectations in terms of quality, this trend is likely to continue.
A major benefit of investing in senior housing real estate is the resiliency of this sector. Like all property types, senior housing investments have their own business cycle. Nonetheless, the demand for senior housing properties is far less affected by the rise and fall in employment or the expansion and contraction of gross national income (GNP).
Furthermore, other market trends may come and go, but there will always be a need for long-term medical and health care facilities for the aging population, regardless of what’s going on with the economy. In other words, its needs-based demand characteristics allow senior housing investments to endure many of the downwind recession pressures faced by other real estate sectors.
The senior housing sector continues to prove to be a strong asset class regardless of the overall economic condition. This means that you can thrive while investing in senior housing properties, even if your investment is not in the best location! As a result, savvy real estate investors are capitalizing on this sector as a low-risk investment that generates great returns.
Another reason why real estate investors are currently motivated to start investing in senior housing properties is the fact that this type of investment has returns higher than most other major real estate asset types. In fact, this sector has already outpaced the rest of the housing market in terms of income stream, appreciation, and total return on investment.
In terms of real estate appreciation, senior real estate investments generated 3.73% of total returns, versus the 0.54% for the overall property index and 1.03% for apartments.
Lastly, investing in senior housing also yields higher total income returns (6.61%) than both the property index (5.53%) and apartments (5.20%). All these numbers prove that a senior housing investment is your best bet for making money in real estate for 2020!
The Bottom Line
Whether you’re looking for ways to diversify your investment portfolio or you’re just getting started with real estate investing in the current year, consider investing in senior housing. There will always be demand for senior real estate properties as European Baby Boomers age and there’s room for growth and new development due to the shortage in supply. Not only that but it’s also a low-risk investment that you can always count on to yield high returns.
Could you be enjoying the cash locked in your Spanish home right now, while retaining the majority ownership of your home?
Cash lump sum…
Cash lump sum, with no monthly payments.
Unable to get a Spanish bank to give traditional Equity Release?
Perhaps you’re worried about your financial situation in Spain but you are not comfortable with giving up full ownership of your home here in exchange for a Bare Ownership deal.
Senior Living Spain are offering our expat clients Progressive Part Ownership.
You can receive a lump sum and either choose to make monthly payments to us in the form of rent, more about that later. Or simply roll the amount forward. You’ll have the option to pay the debt off whenever you wish or simply allow the money you owe to the investor to accumulate and never pay us back anything! You have total control as to what happens- if you have a windfall, simply pay us what we invested plus our rental return and buy back full ownership of your home. Your kids will have that option too after your day, if that is something you wish to make provision for. In a nutshell:
Let us help you to free up cash to:
• Take a holiday.
• Clear existing debt
• Fund home improvements
• Finance a college degree or wedding for your children.
• Pay medical bills.
• Have a safety net of cash in the bank, if you need it.
Never, ever fall into a situation whereby your heirs owe more than what the house is worth.
We are offering a hybrid of an usufruct and simple equity release with next to zero costs for the homeowner, and an option to make absolutely no repayments until such time as they pass away, sell the property or move into state care.
What Progressive Part Ownership is not.
• This is not remortgaging- We are not a bank and besides, the Spanish banks are simply not providing equity release for our clients in 99% of cases.
• This is not a purchase- You still own your home and you can stay there for as long as you wish.
• This is not a traditional bare ownership, in fact, it is not a traditional real estate product.
Senior Living Spain Equity Release Solutions are not a bank and importantly we are not lawyers, please feel free to take independent advice.
If you are over 60 and you own your own home here in Spain, you can access tax free cash on that asset. Your home in Spain is perhaps the biggest asset you own, why not take advantage of the wealth you have sitting in bricks and mortar?
Senior Living Spain have spent the last 9 months sourcing finance from a wide range of providers and we think that Progressive Part Purchase is a service that thousands of our expat clients will want to look at.
Why do we think the Spanish ex pat market wants and needs Progressive Part Purchase?
We receive an enquiry every hour from a potential client asking us how they can get equity release, keep ownership of their property and still potentially have something to leave to their children or heirs when they pass away.
Here’s how it works.
1. Contact Senior Living Spain Equity Release Solutions and fill in the basic application- Address of the property, approx valuation the property, a short summary of your finances - any debt we should know about etc.
2. Meet a broker online or in person who will give you a breakdown in euro and cents of how much you can potentially put into your bank account.
3. Tinsa, (www.tinsa.com) Spain's national and most trusted valuation company will give you an independent valuation of your property. (This is the only up front cost to you- 300 euro approx)
4. We receive the valuation from Tinsa within 3 days.
5. Your assigned broker will make you an offer, which you accept or decline. *
6. If you accept, we talk you through the paperwork and arrange a notary appointment as soon as possible.
7. You choose the repayment option- Monthly rent of say 200 per month ** or just roll up the costs and we’ll receive it from your estate when it is eventually sold.
8. In the notary, we explain the terms and conditions once more- nobody wants any hidden costs to appear or unwelcome surprises.
9. If you are happy, we purchase 30% of the property and write you a cheque there and then.
10. The deal is registered in the Spanish Land Registry, signed and stamped by the notary and witnessed by legal representation.
11. You start to enjoy the cash you’ve released without selling your property, having to move home or get involved with the cumbersome Spanish Banking system. We pride ourselves on not being a financial institution- We are very much a property focused company, protecting our clients and their heirs.
*what will the offer look like?
Progressive Part purchase involves our investor buying 30% of your home in exchange for 30% of the valuation. Let me give you an example: Tinsa values your apartment in Cabo Roig, Cabo De Gata or Cabo de Palos today, post CoronaVirus, at 150,000 euro. We can work all over Spain naturally.
We vet the right investor for you from our portfolio of funds and bankers. The investor purchases one third of your Spanish home for 45,000 euro. (Costs include IVA tax at 10%, Notary & Land Registry 1,500 euro, Set up fee 500 euro, Commission 500 euro) You will receive a cheque for 38,000 euro. Our legal partner Senior Living Spain Solutions will offer PPP clients a discounted rate for wills, NRT payments etc
You can pay off the debt whenever or never.
Although we are not a bank- it is not unlike the formula used in Equity Release.
Let's say you choose “never”. We simply rollover the money owed. Using the example above, and your payments are 7.5% per annum of 45,000 - After year one you’ll owe us 48,375; after year two 52,003 and on it goes. We take insurance to ensure you never owe more than the value of your home and we are never going to force you to sell it.
An easier way to explain is that after year one, the investor effectively owns 32.5 % of the property, after year two 34.6% etc.
If you feel better paying back the 7.5% fee monthly, we’re delighted to accept it. Your call.
Do you want to sell your property and move? That's fine, once we get paid, we’re more than happy to help you.
Do you need to go into care? Use the equity remaining on your property to fund it.
Do you want to leave your home to your heirs? Sure, please do. We’ll help them to buy us out or to sell the property to a third party- We get what we’ve loaned you returned plus the rental fee , they get any and all remaining balances.
**(based on a property in Cabo Roig, 03189 value 150,000 May 2020)
What happens with negative equity?
Just imagine in these uncertain times, the value of your property drops dramatically. Your previously 150,000 home is now selling for 100,000 euro. Even though we purchase 30% of the value of the property, there is a minimum amount that the Progressive Part Purchase is valued at- the principal loaned and the 7.5% accumulated. We ensure you never owe more than the property is worth on today’s market remember.
So, is equity release in Spain something you need to do right now?
Why not get in touch with Senior Living Spain Equity Release Solutions and talk to us about various options.
Please remember we also deal with all major banks- We can present your case to Bankia, Bank Inter and Banco Sabadell.
We can also find you a traditional bare Ownership. We can offer reverse or reversion mortgages through our Bank of Spain registered partners.