Student property investment?

TrustyOven

JohnLock wrote: »

I have £90k savings to invest.

I am researching into investing in student property.

To buy two student apartments for £40,000 = £80,000 total. Buy in good location i.e. Bristol, Leeds Birmingham. New build, clean, efficient. Go to a big city where the demand for new, modern, clean student apartments is high etc.

Yay! So the students already have massive student loans at large interest, and you want to extract as much profit from the students?

JohnLock wrote: »

Give annual return of around 8% combined = £7,000 net profit (after fees deducted).

I think your maths is wrong.


£80,000 * 0.08 = £6,400 and that's before fees and running costs.

JohnLock wrote: »

So, overall, this seems like a very good investment opportunity, with minimal risk, unlike investing in stocks and shares.

Seems very misguided.

Student accomodation = risk of drunk students messing up the place and being short on rent. Single asset class, no diversification. Does not leverage the whole world.

Stocks = "every stiff from the factory stiff to the CEO is working to make you richer"

EdGasketTheSecond

Just buy shares in Empiric Student Properties (ESP). They currently yield 5.65%, are at a discount to property value and do exactly what you are proposing (Student accomodation) but with a much wider spread of property and zero hassle to you.

Aretnap

TrustyOven wrote: »

I think your maths is wrong.

£80,000 * 0.08 = £6,400 and that's before fees and running costs.

If the OP is looking at a conventional investment in rental property he will indeed have to correct the anticipated rental yield for maintenance, management fees, empty periods etc

However if, as I suspect, he is looking at an investment scam along the StoreFirst lines but with halls of residence instead of storage sheds, he will be being promised 8% annual returns, after fees, regardless of whether the room is occupied or not. This is one way to distinguish between an opportunity which is at least potentially legitimate, and one that stinks worse than Grimsby harbour at the start of the fishing season. The guarantee will of course be worth only as much as the people offering it, and only for a limited period anyway.

Note that I'm speaking reasonably freely because nobody has named any particular company as being behind the OP's "opportunity". The moment someone names a specific company I will show due deference to libel lawyers and nervous moderators and point out that while the area is indeed risky, each investment must be evaluated on its own merits and there is no reason to suspect that this particular company is running a scam. None of that should be read as changing what I've already written. 😁

Elika0215

AnotherJoe wrote: »

How about you give me £100k and in five years time I'll give you back £90k. Deal?

Yes!! I'll take it and pay you for holding the money. It certainly feels safer than some of the investment opportunities I'm learning about.

AnotherJoe

Elika0215 wrote: »

Yes!! I'll take it and pay you for holding the money. It certainly feels safer than some of the investment opportunities I'm learning about.

Note that I've only said I'll give you the money back in five years time

bostonerimus

If this is some scheme or "opportunity" being sold to you be some development company then run a mile. Simply put only a fool invests in these.

If you are going to buy property yourself you have a better chance of making some money. But you need to be objective and realize that there are significant risks. You need to do some detailed planning and run the numbers with realistic values for occupancy rate, management and repair costs and taxation. Right now you sound overly optimistic. I'd be more sanguine if you were talking about splitting your money between a sensible portfolio in a pension and/or ISA and a rental property.....sinking it all into property goes against the diversification mantra. Sinking it all into some company scheme is like putting a match to your money. If you are just a naive individual you have been warned. If you are trying to promote some scheme through the forum then shame on you.

Alice_Holt

Amongst other threads from this OP, you will find:

https://forums.moneysavingexpert.com/discussion/5938636/student-apartment-investment

As Pixie5740 suggests on the above thread "Check the posting history".

Some of these gems are really quite entertaining:
https://forums.moneysavingexpert.com/discussion/5917559/stuck-in-limbo-with-40k
https://forums.moneysavingexpert.com/discussion/5888869/withdrawing-20k-in-cash, and
https://forums.moneysavingexpert.com/discussion/5889436/turning-up-to-a-bank-with-17k

I'm afraid Aretnap's excellent analysis may be wasted on this particular forumite.

Aretnap

Alice_Holt wrote: »

I'm afraid Aretnap's excellent analysis may be wasted on this particular forumite.

Oh well, hopefully it will be of use to someone who is actually thinking about this sort of "investment" and finds the thread via Google. And I can always cut and paste it next time someone asks about a dodgy pseudo-investment.

Steve_321

Don't do it ... here is my experience ...

In 2018, I purchased a student accommodation in Liverpool through Experiance Invest (Agents) for £55,000. I was contacted by Experiance Invest informing me that they had a unit for sale at a discounted price which pays 10% rental yield per annum guaranteed for 5 years. The developers were ELLIOTT GROUP (PLEASE DO NOT PURCHASE ANY INVESTMENTS WHERE THE DEVELOPER IS THE ELLIOTT GROUP).

However, after just 6 months, the developer wrote to all the leaseholders that he is unable to continue to pay the 10% yield. Instead, all leaseholders will only get whatever income is generated and be liable for expenses.

It appears Experiance Invest in unable to force the developer to pay. I have so far recovered any shortfall through small claims court which the developers did not contest. However, it appears the developers are planing to close the company through which the development was sold hence not be liable for anything else going forward.

Elliott group is quite a large multi million pound company so it's not that they can't afford it.

I have only purchased the unit based on the 10% rental yield. However, now that the rental yield is null and void, can I not return the unit for a full refund? It appears there were 2 contracts signed during convaiencing, one for the 250 year lease and the other for rental yield.

I'm not sure what I should do next but I thought the threat of bad publicity for Elliot group and Experiance Invest may force their hand.

Please advise.

bearshare

Steve 321 - I would advise you to start a new thread if you want some answers.