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Buy a student apartment?

JohnLock
JohnLock Posts: 74 Forumite
edited 11 February 2019 at 10:11PM in House buying, renting & selling
Hi.
I'm a university student with around 2 years left on my course (from this September).
There are student apartments for sale for around £45,000.
Currently, I am renting and paying £7,500 per year.
I receive student loans of around £9,000 per year.
I use this to pay rent and living costs.

I also have around £70,000 savings, which I didn't have when I started my course (it is inheritance).

Now, would it make financial sense to buy one of these student apartments, say for £45,000, live it in and save the £7,500 rent which I am currently paying to live in this rented apartment? Over 2 years, I can make around £15,000 savings.

Of course, when I leave university, I would sell the apartment or rent it out (the company handles this).

Do you understand where I'm coming from? Is it worth it? Is there any risk involved?

Comments

  • Financial Breakdown

    Gross rent: £5,610
    Ground rent: £250
    Service charge: £1,399
    Lettings fees: £539
    Net income: £3,423
    Gross yield: 13.2%
    Net yield: 8.05%
  • I assume I would not have to pay the rent (because I'll own the apartment), but will have to pay the ground rent and service charge?
  • HampshireH
    HampshireH Posts: 4,752 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    ......we know you have mentioned it once or twice before and have a somewhat interesting thread history with various amounts of savings over last few months .

    What was wrong with the responses to you previous posts?
  • HampshireH wrote: »
    ......we know you have mentioned it once or twice before and have a somewhat interesting thread history with various amounts of savings over last few months .

    What was wrong with the responses to you previous posts?

    Hello. My financial situation has changed. I am now in a position to buy the apartment, but need to fully understand the risks involved. For example, will I be able to sell the apartment for a profit (assuming house prices increase post Brexit)? Do I have to pay thousands of pounds of solicitors and estate agent fees, as if I were buying a real house? If I do, then obviously profit margins reduce and I'm better off staying put and renting.
  • HampshireH
    HampshireH Posts: 4,752 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    Of course you have fees to pay.

    Process is the same.

    Costs will depend on quotes

    More likely to have more fees with leasehold apartment
  • buglawton
    buglawton Posts: 9,235 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    OP, if you're not experienced with property then make sure you take a long hard look at the lease terms and any covenants. Have a legal beagle (or maybe a law student) run an eye over those. Make quite sure you're not signing up to any investment scheme designed by property developers.

    Finally you might ask yourself why the apartments are on the market at that price all at once. How many have changed hands recently?
  • JohnLock
    JohnLock Posts: 74 Forumite
    edited 11 February 2019 at 11:09PM
    HampshireH wrote: »
    Of course you have fees to pay.

    Process is the same.

    Costs will depend on quotes

    More likely to have more fees with leasehold apartment
    buglawton wrote: »
    OP, if you're not experienced with property then make sure you take a long hard look at the lease terms and any covenants. Have a legal beagle (or maybe a law student) run an eye over those. Make quite sure you're not signing up to any investment scheme designed by property developers.

    Finally you might ask yourself why the apartments are on the market at that price all at once. How many have changed hands recently?

    Quick look on Rightmove, there are only 2 apartments left (there are 5 apartments STC or under offer). This could suggest a healthy market? I don't want to be in a position where I'm stuck with the apartment after I move out (can't sell it because the demand isn't there).
  • Bossypants
    Bossypants Posts: 1,276 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper
    At a glance, it seems you have not factored the purchase/sale fees into the above. You will need, at the very least, two sets of solicitors' fees and most likely an estate agent for the sale (unless you can find a buyer without them).

    Personally, I would never buy a place I knew I would be eager to sell within two years, too much hassle and stress. Plus, new build usually come at a premium, whoch you will lose when you sell it second hand, and studios can be tricky to get mortgages on, which limits your pool of potential buyers.
  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    edited 12 February 2019 at 11:52AM
    Worth looking at previous threads, it seems the OP has lost £30k in 6 weeks...


    (edit wrote 65 weeks, it's just 6)
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Are these "student apartments" being sold in a conventional way, or is it one of those dubious "investment" opportunities where you don't end up actually owning your own flat?


    (yes, I appreciate the whole thing is probably fantasy anyway)
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