Studnet pods?

desmonds363

I have £25,000 to invest and thought it would be best to invest it in a small buy-to-let flat worth about £70K and take out a 15 year mortgage for the rest. I have been looking at something called student pods does anyone know anything about these? There are a lot of companies building these in university cities and managing them for you for a fee but I am concerned about the resale value and wonder if I would be better off sticking to a bog standard flat? All ideas appreciated. Thank you in advance.

tomo21217

From what little I know about them, liquidity in selling them back on can be a bit tricky, along with that you are then limited in your to having students in them, where as BTL you have a lot more flexibility and can easily be sold.

jimjames

What other investments do you have?

I wouldn't touch anything that has an artificial valuation that can only be sold back to a developer whether that be student pods, Brazilian land or container storage.

desmonds363

Thanks, I think I agree and would rather invest in a normal buy-to-let. have also been looking at airport carpark spaces, they seem more 'real' than student pods.

Archi_Bald

Weren't you buying your own house on a mortgage? Why are you not using your funds for your mortgage?

eddddy

desmonds363 wrote: »

Thanks, I think I agree and would rather invest in a normal buy-to-let. have also been looking at airport carpark spaces, they seem more 'real' than student pods.

Bear in mind that student pods, airport parking spaces, hotel room schemes are essentially somebody saying:

"I've got a really good idea for a business venture - would you like to make an unsecured investment of £25k in my idea?"

In your position, I would be asking questions like:

- Who am I actually giving the money to? (Presumably a 'development company'. Who are the directors/shareholders?)

- If the scheme goes belly-up, I lose £25k of my personal money - do the directors/shareholders lose any of their personal money? (If not why not?)

- What's the financial standing of the company and directors/shareholders? Their Borrowings, assets etc. Are they financially stressed - overdue mortgages, overdue tax etc.

- Of the £25k, how much goes into building the pods, car park, hotel - and how much is creamed-off by agents, developers etc in commission?

- Have they ever done anything like this before? Was it successful?

etc
etc
etc

So it's very high risk. I would expect very, very, very high returns to take this level of risk.

My advice would be: Don't invest any money that you can't afford to lose, in a scheme like this.

desmonds363

Yes, we have 200K + for the house and savings to fall back on, so just looking to profit from the 25K if possible, just exploring ideas. Thanks.

desmonds363

Thanks Eddddy, yes I think it is a bit high risk and we'd be better with a normal buy-to-let. They say in five years that with re-sale and rent the airport parking goes from 20 to 37K but as you point out whose risk is this! thank you for your reply, very helpful.

jimjames

desmonds363 wrote: »

Yes, we have 200K + for the house and savings to fall back on, so just looking to profit from the 25K if possible, just exploring ideas. Thanks.

Have you got any share based investments? If not why not? If you are prepared for the risks in the scheme above then shares/funds are less risk.

bowlhead99

desmonds363 wrote: »

...They say in five years that with re-sale and rent the airport parking goes from 20 to 37K...

But the 'they' are the people with the vested interest in making you believe that, and they are not independent financial advisers, nor 'on your side', nor even promoting regulated investments.

If you have some truly independently-funded research on what the re-sale price of a few airport car parking spaces within someone else's car park will be in 2019, I'd be happy to see it.

If they are creditworthy enough they may be able to fund a guaranteed minimum rent for a while, but a guaranteed exit value when you want out? "£20,000 please" ; "sorry sir there are no buyers, how about £1?" "surely you have some potential buyers?"; well 90% of the existing owners of spaces want out, and the remaining 10% don't want to spend more than £2000 per plot now we're no longer guaranteeing that unsustainable level of income"

Maybe a new rail link will make all the spaces redundant. Maybe anything. Likewise for the student pods or the individual hotel rooms within a hotel or the acres of vineyards or Colombian cocaine fields or Cayman timeshares under construction in the hurricane zones...

Fortunately I think you get the point, but there are a surprising number of people whose greed will get the better of them and they will throw money at a dubious 10% return without spending thousands of pounds on research and legal/financial advice, just to spite their bank for only offering them 1% on a zero risk deposit account. The chase for yield will have plenty of casualties in the stockmarket where people took on more risk than they really wanted, let alone unregulated property investments!

coyrls

I think Studnet sounds like a good money making opportunity.