Student property investment

MSforums

Hi,
I'm contemplating whether it's worth buying a £50k student apartment in Manchester as an investment?
My issue with student apartments is what happens when I come to sell it?
Looking on RightMove, it seems like no one wants to buy them after they have 'been used' - since there are so many shiny new ones cropping up all over the place by big development firms.
So, when I come to sell, I'll be forced to drop the price and make a loss overall (even after receiving all that rent).

This is the only thing stopping me from investing in one.
Is it really that difficult to sell them if you've had enough and want to move on?

tom9980

and now we have an 8th thread wasting everyone's time.

notrouble

Well you've answered your own question...

eddddy

MSforums said:

So, when I come to sell, I'll be forced to drop the price and make a loss overall (even after receiving all that rent).

This is the only thing stopping me from investing in one.

So the only thing that's stopping you investing is that you'll lose money.

That sounds sensible. I wouldn't put money into an investment, if I expected it to lose money either.

(As you seem to have realised, student accommodation investments are often really just scams.)

Tom99

Look out for a used one.

diggingdude

I reckon you should go for it

eddddy

Tom99 said:

Look out for a used one.

Yes - but often these types of investments are worth less than £0 - i.e. they are liabilities. 

It's because they often generate zero rental income, but the owner/investor has to pay maintenance and management charges each year.

Having read legal packs etc, some of these investments work like this:

• You pay the developer £50k (for a worthless 150 year lease)
• To tempt you in - the developer guarantees £5k annual rental for the first 3 years (they probably don't actually get any tenants, so the £15k essentially comes out of the £50k you've paid.)
• You have to pay maintenance and management charges that start at around £2k for the next 150 years

• (And you have to sign a confidentiality agreement when you 'invest', which doesn't allow you to tell anyone when you realise you've been scammed, or how the scam works.)