Do you own rented property and a day nursery?

whalster

In the news today another whole swathe of services condemned for being too expensive namely childcare, as a landlord this gives me a strange strange sense of satisfaction that it is not only our profession that has been vilified in the press and media.

According to the media nurseries as with landlords are making a fortune where in fact the margins are in general very slim. If the margins were so good in residential property many pension funds and financial institutions would've jumped into this market years ago

Undoubtedly there is a cost of living crisis in this country, it is expensive to rent a property although it's expensive to build and maintain and buy a property, it's expensive to put your child in nursery although their staff costs and overheads are extremely high, people complain about oil company profits energy costs and the weekly food shop . All these are expensive however compared to the margins of obtained say within retail they are very slim within all these sectors.

How's about this for an idea may be all the things above are not overpriced Are not too expensive maybe its wages that are too low

I may buy a nursery and a caravan to tow slowly around Bedale ,then I reckon I would be the most hated man in Britain .

pcgtron

I have nothing to add although your post made me smile

kingstreet

whalster wrote: »

If the margins were so good in residential property many pension funds and financial institutions would've jumped into this market years ago

In my days as a specialist pensions broker consultant, pension funds like Small Self-Administered Schemes were prohibited from investing in residential property.

That may have applied across the board, into FinalSalary/Group/EPP etc but I can't remember.

sandsni

It interesting that while people are calling for a cap on private rents, nobody is asking for a cap on childcare costs.

phoebe1989seb

When we owned our last-but-one house (in Hampshire) our next door neighbour ran a day nursery. These were reasonably large (3500 sq ft approx) detached Victorian houses, many of which (including ours when we initially purchased) had been sub-divided into multiple flats.

Our neighbour and her partner started off with just the one house which as a nursery accommodated around fifty kids. They initially lived *above the shop*. They then proceeded to buy a second property in the same road - not sure what was paid as it never appeared on RM or Zoopla *sold* prices, but ours sold in 2007 for just shy of £600k so I'd hazard a guess at around £400k in around 2000 - and converted that to a second branch of the nursery, accommodating a further fifty kids.

A few years later they bought a mahoosive ex-council building (formerly a large Victorian house later converted to a care home/childrens' home) within the same area and opened that as another branch - that can take eighty kids. Similar sized/style residential buildings sell for in excess of £1m in that location.

In addition, during this time the owner has built up a portfolio of buy-to-lets servicing the local student market as well as purchasing a £1m house to live in. All this from starting with nothing except a teaching degree and a loan from the partner's parents in the mid 1990s.

So, IMHO and from my somewhat limited experience, there is definitely money to be made from running private nursery schools

Halle71

I have read the report but I have issue with it.
Childcare is a huge expense but is it 'expensive' as in not good value for money?

My son goes to a nursery run at a children's centre, one of the old Sure Starts. It is non profit making and he is under two as well which, as being full time puts him in the most expensive bracket at £900 per month.

However, that is every day for 10 hours a day and works out at about £4 per hour. This doesn't seem expensive to me for the service they offer and I believe this cost should be more than your mortgage - you are paying someone to look after your kids not for the pleasure of borrowing money off them.

AndyT678

whalster wrote: »

although their ... overheads are extremely high...

because their rents are extremely high and we're back to it all being the fault of evil money grabbing landlords...

theGrinch

we are all paying more because of tax hidden in pricing.

BitterAndTwisted

The main reason why child-care costs are so high is the overheads. At one time it would have been possible for two adults to look after about 20 pre-schoolers. These days you'd need a higher adult-to-child ratio and you wouldn't be able to look after a single one of them until you'd conformed to all sorts of H&S regs, risk-assessment palaver, first-aid training, criminal records checks and God knows what else.

princeofpounds

In fact the mandatory adult to child ratio is something like 1:3 now I believe, which is a major reason why it is so expensive.

So nurseries and housing do have something in common - artificial restriction of supply.