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Cheap price what's the catch?
kerrick
Posts: 90 Forumite
https://www.zoopla.co.uk/for-sale/details/60924985/
When properties like this are listed for sale the description says 'for investment only'. Are they cash buyers only, will lenders not lend on them? If that's the reason and you have to buy for cash is there any other reason why they may not be suitable for ordinary purchase, i.e. buying to live in? Apart from service charges, are there any other things to 'watch out for!' ?
When properties like this are listed for sale the description says 'for investment only'. Are they cash buyers only, will lenders not lend on them? If that's the reason and you have to buy for cash is there any other reason why they may not be suitable for ordinary purchase, i.e. buying to live in? Apart from service charges, are there any other things to 'watch out for!' ?
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Comments
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Completed and Tenanted.You could get a mortgage, but a BTL one, not one for owner-occupation.3
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The advert says “ 10% deposit available when purchasing for personal use” which implies someone could theoretically buy one to live in. However these types of apartments are often part of student accommodation which is why generally they’re sold as investment only, part of a scheme where the student tenancies are managed by a third party. I’ve also seen some that actually turned out to be hotel rooms.
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7% return but the maintanance and ground rent reduce this to a loss. The advert has no dimensions or details, they are basically bedsits..... It is all nonsence.3
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You need to be very careful. Essentially, it looks like it's an unregulated investment scheme.
I don't know the company you've linked to, so I can't comment on them, but here's a few comments about other unregulated student accommodation investment schemes that I've seen...
They are 'business-to-business' investments, they're not regulated by the FCA (or anyone else), so you probably have no protection at all. Your could lose 100% of your initial investment, and continue to suffer further losses.
The legal pack I saw was about 120 pages long, comprising of a lease, leaseback agreement, management contracts, etc. The terms were outrageously bad. (The really bad stuff started at about page 95 of the pack.)
If anyone had actually read and understood that 120 page legal pack, I really don't think they would have invested a single penny.
I can only assume that the people who bought investments either didn't read the legal pack, or didn't understand it.
But maybe the scheme you've linked to is much better. But you really need to do your due diligence to check.
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