If is not often one gets an opportunity to purchase a property at up to 50% off but it’s not too good to be true. It is now possible thanks to Life Tenancy Investments says leading property authority, Guy Charrison.
Unlike traditional buy-to-let which many investors choose, instead of obtaining your income monthly over the duration of ownership, with Life Tenancy Investments, you can often buy properties for less than 50% of their value this delivering instant equity which for many is highly attractive.
Indeed with the UK economy back on its feet and the housing market booming, there’s never been a better time to invest in bricks and mortar, especially for pension provision.
Numerous large and established pension companies such as Grainger PLC (the largest owner of residential property in the UK), William Pears, Mountview Estates and Santander have been making Life Tenancy Investments for almost 40 years.
In fact if you hold a pension with one of these blue chip providers, it’s more than likely that you already own shares in a Life Tenancy Investment, but now, for the first time, these highly lucrative investment opportunities are being offered to individual buyers via experienced professionals such as Guy, in partnership with Wakeley Residential Investments Limited.
So in a nutshell, what is a Life Tenancy Investment?
Life Tenancy Investments offer a simple and straightforward way to invest for your and your family’s future and are a viable alternative to buy-to-lets.
In return for the freehold or leasehold interest in their property being sold to an investor the occupier receive a lease for their lifetime with no rent payable. The occupier maintains and insures the building. The property then fully reverts to the investor on death or moving to long term care.
What makes a Life Tenancy Investment an attractive property investment?
The investor has the opportunity to purchase a property for a fraction of its current open market value offering superb potential for capital growth, especially in a rising market such as today. The investment will have a Life Tenant in residence at completion who will remain in the property until they either pass away or move into full time residential care.
The Life Tenant will receive an agreed sum of money up front in return for ownership for them to do with as they please.
How does it work in practice?
A property open to a Life Tenancy Investment is made available to buyers at a substantial discount to the open market value. Investors are able to purchase the property and will be the named owners on the title deeds. The ownership will be subject to the lifetime lease granted to the Life Tenant.
The property continues to be occupied by the Life Tenant who is aged 60 years or over. The Life Tenant has a lifetime lease on the property entitling them to live in the property rent free until they either pass away or permanently move into long term care.
At the point that the Life Tenant vacates the property permanently, the Life Tenancy ends and the investor has vacant possession of the property making them free to sell the property and realise their investment.
The investor is entitled to all the sale proceeds unless the Life Tenant has retained a percentage of the property value in which case the investor will send the Life Tenant’s proportion of the proceeds to them once the sale completes. If the Life Tenant has retained a percentage this is reflected in the investor’s purchase price of the investment.
What are the Investor’s main legal obligations?
To allow the life tenants to live peacefully and quietly in the property for the rest of their lifetime rent free.
What are the Life Tenant’s main legal obligations?
During the Life Tenant’s residence, they will repair and maintain the property as well as covering all associated expenditure including maintenance and repairs, utility bills, council tax and any service charges or ground rent (if applicable).
What happens when the Life Tenant vacates the property?
At the point the Life Tenant vacates the property permanently the property is the investors’ to do with as they wish. They can choose one of the following options:
- Sell the property and realise their investment with potential substantial capital growth
- Rent out the property and enjoy the monthly income obtaining a high return on capital as the property was purchased at a Life Tenant price
- Move into the property and live there
- Early exit opportunity – Investment can be resold to an alternative investor at an earlier stage if required
Why has Guy Charrison personally invested in Life Tenancy Investments for over 20 years?
“They are easy to manage as the occupier maintains and insures the building and are an ideal investment for you, your children or grandchildren. Historically these Life Tenancy Investments have offered a fantastic return on initial investment – they certainly have for me! The investment is growing in value due to the increasing age of the Life Tenant in addition to any capital growth – the ‘double line’ growth opportunity.
“Ideally, to maximise profit, Life Tenancy Investments should be purchased as medium/longer term investments but I also am aware from first-hand experience that investor’s needs may change over the years and there can be a requirement to realise the investment before the Life Tenant permanently vacates hence investments can be resold to an alternative investor at an earlier stage if required.”
Guy Charrison, Founder and Owner of the Guy Charrison Property Consultancy and hands on Life Tenancy investor explains,
“Life Tenancy Investments offer a simple and straightforward way for retired people to significantly reduce the price of their next home in return for lifetime ownership. They become the Life Tenant of the property whilst the investor is afforded the opportunity to purchase bricks and mortar for a fraction of its current open market value offering superb potential for capital growth”
Guy continues, “The Life Tenant has a lifetime lease on the property entitling them to live peacefully and quietly in the property rent free until they either pass away or permanently move into long term care. They just have to maintain and insure the building as they would anyway. For me, this is a win-win situation.”
One such case in point is Mr Freeman, a Superboomer who wanted to move out of his small Central London studio flat into a larger freehold property with a garage so that he could purchase his dream car – an American Thunderbird.
He sold the ownership of his studio to an investor thus becoming a Life Tenant. In return he used the upfront lump sum to purchase another property complete with garage to house his new pride and joy, the Thunderbird. Mr Freeman now has the best of both worlds as he can spend time in London in the studio or nip off to the country to drive his new car.
For more information on the process and Life Tenancy Investment opportunities available through Guy Charrison Property Consultancy, call today on 01344 851 007 or visit www.guycharrison.com.