An Introduction to Social Impact Real Estate

TownhouseInvesting in property has traditionally been a choice between off plan (new build) and older properties that often require renovation to be let out on the private market.

However, there  is an exciting third option called social housing investment which is attracting swathes of investors looking for a good return on investment whilst making a positive social impact.

Simply put, social housing investment refers to the process of investing in properties that are specifically used as social housing – like council houses, housing association properties or assisted living facilities. The social housing investment sector includes different leasing partners and investment structures.

This blog introduces one of the most secure social housing investment schemes called Social Impact Real Estate (SIRE) which is based in the UK. The investment structure and partners within SIRE are unique from other social housing investment programs.

 Social impact real estate involves purchasing a fully renovated property  and signing a long-term rental lease with a housing association who utilizes the home to shelter vulnerable individuals. The housing association maintains the property and pays the owner (investor) a monthly rent which is fully funded by the UK government and increases with inflation annually. 

Social impact real estate in the UK is available to UK residents and international investors alike.

Is this the right investment for you?

When deciding on the right investment product, it is important to consider what your primary objective is.  Are you focused on receiving a steady income? Or is long-term capital growth  your primary objective?

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Our Social Impact Real Estate houses are an excellent option for income-focused investors as they provide a monthly, government-funded rent for 25 years. There are no void periods  in between tenants as often experienced in the private market. The income is linked to inflation and therefore increases annually.

Every investment involves some level of risk. For example, when buying off-plan, there are several risks to be aware of  which, when mitigated, can provide strong capital growth. With Social Impact Real Estate, the risk level is very low as you are purchasing an existing house which has been fully renovated.

Are you looking for a hands-off  investment? With our model, the investor purchases a fully renovated house,  so from day 1 you own a high-quality property with no work required. The lease agreement is in place and the housing association begins to manage and maintain the home and pays you rent immediately. There are no running costs as the housing provider is responsible for all maintenance and management costs. Property tax is also paid by the tenant/housing provider.

As with any investment, it is important to understand all the associated costs. Our Social Impact Real Estate houses start from just £93,330 and are cash only purchases. Purchasing without using a mortgage is the lowest risk and lowest cost form of purchasing and maximizes the cashflow from the property.  You will want to ensure that you have an extra 6.5% for closing costs.

With the government backed lease in place, our social housing investments provide a guaranteed 9% net income for 25 years.

The many benefits of social housing investment

We have outlined many of the benefits of this type of investment already:

  • Lower risk than most property investment strategies
  • Government-funded monthly income for 25 years
  • Fully managed and maintained for you
  • No running costs or void periods

Perhaps the standout benefit of Social Impact Real Estate as compared to traditional private market property investment is the positive impact that you are making to society and specifically to a person who needs it most. This cannot be measured by figures but rather it is life changing for the people that require assistance from our housing providers.

Your property becomes a stable home for vulnerable people, transforming their lives and offering a better future.

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Tenants commonly include, but are not limited to:

  • Victims of domestic abuse
  • Asylum seekers fleeing war-torn countries and/or human rights violations
  • Adults and children with learning difficulties or mental health challenges
  • Homeless families & individuals

At the same time, the long-term, hassle-free income delivered by these properties means you avoid all the usual time-consuming headaches associated with property investment and gives you the freedom to spend more time doing the things you love.

Get started

Together with our housing provider, we source and renovate 2-bedroom  houses that are suitable for vulnerable tenants and agree the lease with a leading UK housing association. We assist you in every step of the purchase process which can be completed within 4-6 weeks. The income is paid from the first month of ownership.

Finlock Property Investment offers a clear, personal and comprehensive service, so you can grow your wealth with peace of mind and spend more time enjoying the rewards.

For over 14 years we have dedicated ourselves to providing access to the best selection of UK property investments to ensure we have something to match every client’s goals.

You invest in property, we invest in you.

Contact us today or call 0208 095 0205 (UK) or 647 724 5815 (Canada) to learn more about social housing investment.