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Buy a student apartment?

JohnLock
Posts: 74 Forumite
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?
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?
0
Comments
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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%0 -
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?0
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......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?0 -
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.0 -
Of course you have fees to pay.
Process is the same.
Costs will depend on quotes
More likely to have more fees with leasehold apartment0 -
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?0 -
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 apartmentOP, 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).0 -
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.0 -
Worth looking at previous threads, it seems the OP has lost £30k in 6 weeks...
(edit wrote 65 weeks, it's just 6)0 -
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)0
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