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When you are preparing to sell your freehold or leasehold nursing home, you might face some additional complications compared to trying to find a buyer for other properties. This guide not only explains what those potential hurdles might be, but it also offers important advice on some simple steps that you can pursue in order to get a fair price for your property and sell it fast.
- Making the decision to sell your nursing home
- The types of buyers interested in nursing homes
- Factors that can affect selling a nursing home
- Preparing information on your nursing home for buyers
- Paying Capital Gains Tax on the sale of a nursing home
- Four methods to find a buyer for your nursing home
- Questions and answers about selling a nursing home
Making the decision to sell your nursing home
Nursing homes, which are sometimes also referred to as nursing care homes, can be found throughout the UK, with estimates showing that there are thousands of these properties ranging in size from small to large with many rooms. See the article from Which website discussing nursing homes.
These are properties that provide full-time accommodation to residents, who are people that have specific conditions for which they need extra support for their daily lives, typically with around-the-clock attention. Such conditions can include, but are not limited to, dementia, drug or other substance abuse, significant learning disabilities, and many other situations.
A typical nursing home will give its residents accommodation, regular meals, on-site activities and most importantly 24-hour medical care provided by registered nurses.
You might find that a non-profit organisation or a local authority runs some nursing homes, but many others have private owners. If someone owns the land on which the nursing home is located as well as the building itself, they are considered the freeholder owner of the property. If someone owns just the building in which the nursing home is housed and only for a set number of years in exchange for paying the freeholder a ground rent, then they are a leaseholder.
The Town and Country Planning (Use Classes) Order 1987 specifies that nursing homes fall under the use class of a "residential institution" that distinguishes it from other types of properties, such as commercial buildings that can include shops, post offices, funeral directors, sandwich shops, travel agents and more.
A privately owned nursing home will typically charge hundreds of pounds per week for staying at the property, and this expense can be met in several different ways. Some people will be able to pay from their own funds, whereas others can get assistance, such as from the local authority.
As the owner of a nursing home, you might have enjoyed the time you’ve spent running it, and hopefully it was also a profitable business. But you might not want to sale for various reasons, such as needing raise money for your retirement or paying for a move to another country. No matter your reason for wanting to sell your nursing home, this guide will walk you through the most important elements to consider as you aim to make a fast sale at a fair price.
The types of buyers interested in nursing homes
When you’re trying to sell a freehold or leasehold nursing home (described in detail on the Carehome website, you’ll find that there are typically two categories of potential buyers that might express interest in purchasing the property.
The first category would be people that plan on continuing to run a nursing home out of the property, most likely a private buyer who hopes to make a decent profit from the business. Later in this guide you’ll see some of the most common types of information that these buyers will want, and it’s best to provide as many answers to their questions upfront.
The second category covers a large range of interested buyers but generally all with the same idea in common – that they want to own the property not to continue operating it as a nursing home, but instead to redevelop the building so that it can be used for another purpose.
For example, when selling, a builder or other type of property developer might be interested in making major construction changes to the nursing home in order to convert it to another use, which could be some type of commercial business, offices, or even redeveloping it to become a block of flats that they can lease.
This category of buyer will have almost no interest in the balance sheets, inventory and other facts about your nursing home. Instead, they will make their decisions based on whether they think they will be able to make a decent profit on whatever work they might have planned.
Factors that can affect selling a nursing home
Just as the with the sale of any other type of property, there are many different elements that can affect how quickly and at what price you might be able to sell your nursing home as discussed in this Truelegal website article, and also the price that any interested buyers could offer for it.
Location is one of the most important issues for both buyers that would like to continue using your property as a nursing home or to redevelop it for another purpose. That’s because a freehold or leasehold property situated in a popular neighbourhood with good local amenities is typically seen as a much more valuable one than properties located in less desirable areas. There is nothing you can do to change the location of your property, so if it’s not in a high demand area, you should promote other positive aspects to buyers as described below.
One of those aspects might be space; the larger the property, the more interest you’re likely to attract from buyers who either want to use the building as a nursing home or to redevelop it for another reason. A property that has many rooms has the potential to produce greater revenue when run as a nursing home, by virtue of being able to house more paying residents.
A related issue that will be of interest to buyers, regardless of whether they want to keep running the property as a nursing home or redevelop it for other purposes, is the amount of car parking spaces available. A property that has abundant car parking spaces will likely be more popular than one where it’s hard to park.
Another important element is whether your nursing home has any type of "problem" such as a physical flaw like dry rot or subsidence, and the extent of that issue. If the problem is relatively small scale, potential buyers might not be too concerned about having to pay to fix it once they own the property. However, if the problem is large scale and would be time-consuming and expensive to fix, this can create a couple of outcomes – either the buyer will lose interest, or they will want to discount their price offer by the anticipated cost of doing the repair work.
One useful tip to know is that quick property buyers can be a good option for selling a nursing home that is considered a problem property. The companies, like the London-based LDN Properties, can make competitive and swift offers to buy almost any condition, type, size, shape or age of property, even those with major negative issues that the owner cannot fix before selling.
For those buyers who are looking to continue operating the property as a nursing home, they will be more interested in yours if you are able to prove that it is a consistently profitable business with manageable costs, a ready pool of available and well-trained staff, a decent inventory of furniture and other items, and other facts as detailed in the next section.
Preparing information on your nursing home for buyers
As you get ready to sell your nursing home, you should collect as much information for possible specifically for those buyers who are interested in operating the same business as the future owner. Having plenty of information upfront can greatly assist your sale of the property, as buyers tend to respond more favourably when sellers can immediately answer any questions that they might have, rather than the buyer having to wait weeks or longer to get an answer. Make sure you read the Businesses For Sale website article discussing how to sell a care home.
For would-be nursing home owners, some of the key details that they may requested are:
Inventory: Buyers will want information on what furniture and other fixtures and fittings you will be leaving behind after the sale. If they like the current setup at your nursing home, they would probably be more inclined to make an offer knowing that they’ll get to keep your inventory.
Revenue: Whether or not your nursing home is making a profit or a loss will be a major consideration for this type of buyer. They will probably not have much interest in your property if you financial documents show that you consistently make a loss with costs exceeding revenue.
Costs: This will be highlighted in your revenue figures, but you should also be prepared to give prospective buyers detailed information on the typical costs that your nursing home has, which can include items such as utility bills and any other expenses you have to pay regularly.
For buyers that might want to redevelop your nursing home, they will want to know about:
Planning permission: If you have already approval from your local authority to make major physical changes to the property, developers will see this as a good thing, because it means they can avoid having to go through the long and costly process of getting planning permission.
Paying Capital Gains Tax on the sale of a nursing home
It’s important that you have a proper budget for the sale of your nursing home so that you understand the various potential costs associated with it. One of those expenses can be Capital Gains Tax, which is a levy that the UK government charges on the gain, also known as the profit, that you might make when selling a tangible asset such as a property or car.
You should consult with a financial professional to ask about your potential tax burden when selling your nursing home, because you might be able to reduce or even eliminate it.
Four methods to find a buyer for your nursing home
Perhaps the most important decision that you’ll have to make when selling your nursing home is deciding between four different ways to find a buyer. You can sell on your own, sell through an auction, sell using an estate agent, or sell to a quick buyer such as LDN Properties.
All four approaches have their own unique benefits, but some of the choices also have rather large drawbacks, for example taking many months to find a buyer or requiring that you pay fees.
To find your ideal method for selling, write down your top goals for your sale, such as how much you might be willing to pay in commission, how speedily you would like to secure a buyer, and other key points. Then compare this information against the specific details of the four methods outlined below and this should help you identify the one that best pairs with your needs.
Selling on your own
This can be a stressful way to sell a nursing home because you’ll be responsible for every step, starting with preparing a listing that features photographs of the interior and exterior of the property and a detailed description of it. You’ll have to pay to advertise this listing online and in local newspapers, and organise viewings for potential buyers to visit the property.
It’s a large amount of work that will take a lot of time and effort, and very likely also be quite expensive. This is not something that you will be to attempt doing just in your spare time, and you should be prepared for waiting more than a full year before getting a serious offer. Therefore it’s only suggested if you have any experience with successfully selling a nursing home, or you have an experienced friend or family member who is willing to help out for free.
Instead, consider selling your nursing home to a quick buyer because you won’t have to pay any fees but you’ll often get an offer much quicker and the sale should be completed within weeks.
Selling through an auction
Auctions can be quite time consuming, because there will be a wait of many weeks or months from when you list your nursing home for sale and when the auction occurs. And if you succeed at selling the property, the winning high bidder will typically have about 28 days to complete all of their legal paperwork and other required steps in order to finalise the purchase.
In some situations you might be able to negotiate a shorter deadline with the auctioneer, which can help to speed up the sale, so it’s worth inquiring about this with individual companies.
You also never know what sale price you’re going to be able to get when selling at an auction. Make sure that you select a reserve price – the lowest value at which you agree to sell – at a level you are comfortable with, even after you pay the auctioneer their fees.
Remember that if your property does not receive any bids at the auction then it will be deemed unsold, and you will have to start over with trying to find a buyer, creating more delay.
Selling using an estate agent
Estate agents can take quite a long time to find a buyer for properties, so you shouldn’t be surprised if your nursing home remain on the market for more than an entire year. That’s far from the best method if your top priority when selling is getting a buyer as fast as possible.
Still, this can be a low-stress way to sell your property, because the estate agent will take on the duty of preparing and advertising the listing, organising and leading viewings, and fielding offers from potential buyers. If you’re looking for a method of selling that requires you to do very little work as your main goal, then using an estate agent could be a good fit for your situation.
Just remember that you will have to pay an estate agent commission if they are able to eventually find a buyer for your property. This fee will be deducted immediately from the proceeds, adding to your costs. For those sellers looking to reduce their expenses, you should consider other selling options.
Some estate agents might also not have any experience with selling nursing homes, and if that’s the case, then they may not understand how to best market your property and attract buyers. Before deciding to sell your nursing home through a particular estate agent, you should always ask them about whether they’ve managed to sell this of property in the past.
Selling to a quick buyer
This can be the fastest way to sell a property, because quick buyers have the ability to immediately purchase almost any type of freehold or leasehold property within a handful of weeks, and that includes the time it will take to exchange contracts and pay you the proceeds.
They can move so quickly because they have the financial resources to proceed with buying properties within days, rather than other buyers that might have to wait for many weeks or months to initially win approval for a mortgage that will pay for the transaction.
Trustworthy quick buyers also should promise to never make you pay any commission to sell your nursing home, so you can count on receiving the full sale proceeds. This will help to keep your selling costs down compared to the fees you’ll pay when selling via a third party. If you are looking to sell without the neighbours knowing, quick homebuyers like LDN Properties can help you property discreetly.
Another important advantage of using this method to find a buyer is that quick buyers will be willing to make a competitive and speedy offer for your nursing home even if it has a major physical flaw such as high asbestos levels or any other issue such as being located in a high risk flood zone. Quick buyers are known for making fast and fair offers for these so-called problem properties, compared to other methods of selling where you might receive less-competitive offers from buyers.
Top queries and answers about selling a nursing home
If you’re thinking of selling your property quickly, there may be some questions you need answering. Here are a handful of the top questions we’re asked about selling a nursing home:
Your top questions when selling a nursing home
Generally nursing homes are those that provide accommodation to people who need around-the-clock care due to a physical disability or serious illness. These properties have bedrooms, bathrooms and areas for communal activities, and they all have registered nurses on site who are able to provide care for the residents on a 24-hour, seven day a week basis.
They can be either; you own a freehold nursing home if you are the outright owner of both the building that houses the nursing home and also the land on which it is located. You are a leasehold owner if you only have ownership rights over the property for a set amount of time, typically many years, in exchange for paying a regular ground rent to the freeholder.
No, there is no mandate that you must repair any problems with your nursing home before trying to find a buyer for it. However, you should be prepared that problems – which can range from damaged roofs to subsidence and more – can make some buyers lose interest in the nursing home entirely, whilst other buyers might reduce their eventual offer on the property.
If someone is interested in possibly purchasing your nursing home and continuing to operate it as that type of business, they will likely want to see as much information as possible that shows the nursing home is profitable, because they won’t want to buy a business that is likely to fail. Be sure to get information to buyers as fast as possible, so that they do not lose interest.
Not necessarily. If you sell your property to a no-fee quick buyer like LDN Properties or you sell on your own without any third party assistance, then you won’t have to pay any commission. If you sell your nursing home via an auction or estate agent then you can expect to pay fees as a percentage of your sale price.
Contact a quick buyer such as LDN Properties, because these companies often have the ability to complete the purchase of almost any type of freehold or leasehold property within just a handful of weeks, and that includes paying you the proceeds and exchanging contracts. Selling on your own, via an estate agent or at an auction can all be slow and take at least many months.
You should ask individual quick buyers if they belong to The Property Ombudsman (TPO), an independent organisation that writes rules all members must follow that aim to guard owners against fraud in the quick buying industry. Be careful selling your nursing home to a company that either refuses to join TPO or claims to be a member but can’t prove it, as this may not be legitimate.
