Mis sold a student let

Uriziel

The thing about students is that they only have that much money unlike working people where you can find wealthy buyers and renters. I don't think you should be expecting increase in value from anything related to students. Have you not made £20k over those last 3 years? So you would be essentially selling at cost? I would just take it and move on.

QrizB

As someone with a child who's about to go away to Uni (but not in the NE!), buying a studio flat for £40k then selling it on after three or four years might seem more attractive than paying rent.

But as the OP identifies, the devil's in the details. Ground rent, service charges etc. all need to be taken into account.

Expecting to make a profit rather than break even might be optimistic.

QrizB

Here's a typical ad of the type that might've lured the OP in, for anyone who hasn't seen them:

https://www.pureinvestor.co.uk/developments/newcastle/burgess-house/studio-1-14/

itsthelittlethings

How high was the yield promised? I’m guessing maybe 8-10%?

RHemmings

QrizB said:

Here's a typical ad of the type that might've lured the OP in, for anyone who hasn't seen them:

https://www.pureinvestor.co.uk/developments/newcastle/burgess-house/studio-1-14/

Non-refundable reservervation fee. Run a mile! The return looks OK, but it seems that well over half the income is going straight to the freeholder, and property management company. 

artyboy

Nah... with the Pratchett themed handle, I'm thinking wind-up...

eddddy

This is a general comment about some unregulated investment schemes for things like student pods, hotel rooms, car parking spaces etc - I'm not talking about  any scheme or company mentioned in this thread, because I don't know anything about those schemes or those companies.

This is just a general warning about investing in unregulated investment schemes.


Here's an example of how some unregulated investment schemes might work:

• An investor invests £65k for a student pod

• £10k (or more) of the £65k is paid as commission to the salesperson who 'groomed' the investor into handing over the money

• £20k of the £65k is paid as commission/fees to others higher up the food chain

• £24k of the £65k is put to one side - to pay the investor the guaranteed £8k a year rent for the first 3 years (because it turns out that nobody is interested in renting the student pod, and/or the company doesn't put much effort into renting out the pod. They are happy with their upfront commission/fees.)

I read the 120 page legal pack associated with one of these unregulated investment schemes.

I don't think that anyone who read and understood the legal pack would ever invest in that scheme. (Lease, leaseback agreement, contracts, etc).

I assume they relied on selling investments to people who didn't read the legal pack and/or didn't understand the legal pack and/or didn't ask an independent solicitor for advice.

ReadySteadyPop

Uriziel said:

The thing about students is that they only have that much money unlike working people where you can find wealthy buyers and renters. I don't think you should be expecting increase in value from anything related to students. Have you not made £20k over those last 3 years? So you would be essentially selling at cost? I would just take it and move on.

Many overseas students are from well-off/wealthy families, they need to be to afford the fees now?

ReadySteadyPop

ookthelibrarian said:

Has anyone else purchased a Student Let property investment where you are promised massive interest and growth.
We purchased a number of Student Let's in blocks in the North East. Hight yield  promised and ever increasing value. 
For the first 3 years we did get high return then the charges began rolling in. 
The management company proved inept at best. But at least the units were let.
However when we have looked into selling our units, all purchased at around £65k each the value has dropped to under £40k each.
This is a huge scam across the country, not only in student blocks but in residential blocks as well.
Does anyone know of "no win no fee" solicitor who is willing to take this up on our behalf. There are many of us and the returns should be good.
Added to our woes we were almost scammed by a known fraudster. This has been in the news and on the BBC. but for the hard work of a few of us in exposing him Now I fear we may be being scammed by the landlord.

If you can actually get as much as 40k, sell them and chalk this up as an investment lesson.

QrizB

ReadySteadyPop said:

Uriziel said:

The thing about students is that they only have that much money unlike working people where you can find wealthy buyers and renters. I don't think you should be expecting increase in value from anything related to students. Have you not made £20k over those last 3 years? So you would be essentially selling at cost? I would just take it and move on.

Many overseas students are from well-off/wealthy families, they need to be to afford the fees now?

You might not have noticed (if you've been avoiding UK politics for the last decade) but the government is restricting the number of student visas it issues.

You can't rely on wealthy foreigners renting your student lets.