Primary Healthcare Properties (PHP) specialises in owning and managing healthcare properties, and its manager Harry Hyman has warned investors that are new to the healthcare property market tobe careful.
Speaking to Investment Trust Insider in July, Hyman said that investors in commercial property are looking to diversify the type of properties that they own and are searching for high yield sectors. Purchasing GP surgeries and medical centres can yield reasonable rent returns, but there are difficulties of which inexperienced investors in the medical sector need to be aware.
Medical centres are high-value properties. Many investors are looking at testing the market by purchasing lower value properties. Hyman gave an example of purchasing a house that is rented to one or two doctors. The property could achieve a 6% rental yield, which is a good return, but it is risky. If the doctors do not renew the leases, it could revert back to a house, with lower rents.
Managing healthcare properties requires specialist skills. Investment is often required to upgrade and refurbish properties. Rents need to be reviewed on a regular basis.
PHP is looking at expanding in Ireland because property prices are better than the UK and there is less competition to purchase property.
Hyman is not worried about the political controversy of private investors involved in the public sector, or the Labour Party’s threats to nationalise.
If an investor has the necessary skills to manage healthcare properties, a mortgage broker can help secure commercial mortgage funds for purchases. There are bridging loans available for refurbishment work.