Interesting facts (questions and answers)

Investors looking for a secure investment with an attractive return and who don't want to incur any hassle with their investment are in excellent hands here. An investment with comparable returns and security is very difficult to find on the investment market today.

This asset class is certainly not suitable for those who only want to park their money for the short term. A nursing home property is ideal for wealth accumulation and retirement planning, so the investment horizon should be medium to long-term.

Before building a care facility, the developer or operator conducts a detailed site analysis and assesses its suitability. For investors in this investment class, proximity to their hometown is not crucial, as the local operator and property manager take care of everything, and the property is leased long-term. Security, return, and longevity are the more important criteria for investors.

Additional purchase costs include real estate transfer tax, as well as notary and land registry fees. Real estate transfer tax varies by federal state and ranges from 3.5% to 6.5%. Notary and land registry fees are approximately 1.5% to 2%. There is no brokerage fee.

The costs for property management and a small maintenance reserve are deducted from the monthly rent.

The leases usually contain a so-called value protection clause, so that the rent does not remain at its original value in the event of inflation.

The building can be depreciated at 2% annually for 50 years, and the inventory is usually depreciated at 10% for 10 years. After 10 years, capital gains tax is waived upon sale of the nursing home.

The 2022 Annual Tax Act stipulates that buildings completed from January 1, 2023, are to be depreciated at 3%, which corresponds to a useful life of approximately 33 years.

Thanks to the energy-efficient construction, low-interest KfW loans of up to €150,000 can be obtained. Depending on the energy standard, repayment subsidies of up to €24,000 are available.

Like any other residential property, a nursing home is registered in the land register. If the purchase price is fully or partially financed with borrowed funds, a corresponding mortgage is registered in Section 3 of the land register for the financing bank.

The buyer and their immediate family members have the option of moving into a vacant apartment in the care facility if needed. This preferential occupancy right often applies to all of the operator's facilities in Germany.

Typically, the operator bears the maintenance costs. Only the costs for the roof and truss remain with the buyer.

The operator is responsible for occupancy of the individual apartments. They pay monthly rent for the entire care property, regardless of occupancy. This rent is then distributed among the individual owners by the management, even if individual apartments are vacant.

If the lease term has expired, this does not mean that the care facility can no longer be used. After all, the residents must continue to be cared for. Either a new lease agreement is concluded with the current operator, or a new operator must be found.

This refers to the start-up phase of the care facility after completion and takeover by the operator. Especially in the initial phase, the operator has to make significant investments, and it usually takes several months until the facility is fully occupied. To avoid placing too much strain on the operator during this phase, a period during which the operator is not required to pay rent is often contractually stipulated.

Like any investment, investing in a nursing home apartment carries a risk. The greatest risk with a nursing home property is the operator's default. However, this is generally considered relatively low. Despite this very low probability of operator default, insolvency can occur on occasion. In this case, the respective social welfare agency appoints an interim operator to continue running the facility until a new operator is found.

The rent is paid regardless of occupancy, even if the property is vacant.

Yes. Forecasts predict that there will be a massive shortage of nursing care places in the coming years. Far fewer nursing facilities are being built than the number of places needed.

Size plays a role in the financial success of a care facility. Units that are too large carry a greater risk of occupancy, while units that are too small are often not profitable in the long term due to their size. Experts consider a size of 80-120 apartments in a care facility to be optimal.