If you are looking to invest in property for the long term then I think you should consider supported living as a way of holding property.
Long term tenants
You get a tenant who leases your property for anything between 2 and 15 years. Anyone who has been a landlord for a while knows how quickly tenant changeovers can eat into your profits, even if the property is only empty for a few weeks and there is minimal work to do between tenants this void period can be expensive; a few hundred pounds for repair work and then the tenant find/referencing fees can eat into a couple of months profit on an average buy to let. If your property is an HMO then tenant turnover can be more frequent and costs can be higher.
If a supported living provider is leasing your property, typically you will not be responsible for void periods for the length of the lease. This means over the term of the lease you are generally net in profit not to mention a reduced hassle factor as changeovers cost your precious time.
Once your property is leased you are generally not responsible for utility bills, this does not impact standard buy to let landlords but for HMO landlords this can be significant, especially in the current market with uncertainty around rising utility costs. This gives you certainty about the income you receive each month.
As the supported living provider leasing your property is managing the property they will take over management of the property so you do not need to pay a letting agent for this. If you self manage your properties then consider the significant time saving involved.
You may still want a letting agent to perform periodic inspections of the property on your behalf but many agents will offer this at a reduced cost to their standard monthly letting fees.
Depending on the lease terms you agree, most providers will cover internal damage and the heavier wear and tear their tenants may cause on the property. This results in more net income for you over the lease term as well as saving you time as they will very often manage repairs.
In my experience, these combined benefits offer the closest thing to a hands free landlord experience. Having owned private rental property and supported living property for a number of years I prefer the phone calls from the provider saying “Lisa, just to let you know we are replacing 3 doors that got damaged” versus the “Lisa the drains in the garden are blocked with leaves again can you get someone to sort it” calls which result in my time and cost.
You are providing a home for those in society who need them the most, this is what appeals to many property investors who are looking to make a difference with their property portfolio. Knowing your property business is helping others is a hard feeling to beat.
I argue that supported living if set up well, is possibly the best way to hold property for the long term. There can be considerable time savings and often net monthly income is higher. If you combine a supported living lease with a buy refurbish refinance strategy it can be a powerful way to build long term wealth.
If you want to find out how to find a provider to lease your property then download my free guide here