New build student apartments

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    New build student apartments

    I am looking at getting my first BTL.

    I see quite a few student apartments that are new builds up north, they seem to be fairly cheap i.e 50-60k starting prices, with apparently 8% yield guaranteed for 3 years?, quite a lot of websites suggest how these are a "good investment" but at the end of the day, they are trying to sell you them. Because I live in Essex, it isn't something I would be able to manage or even go and visit often, so would be relying on a management company for 99% of the time.

    Basically are these a good investment for a first BTL, or am I better of getting something residential at potentially 3x the value but somewhere localish? I'm concerned that student flats are more likely to get trashed and have a lot more wear and tear and therefore need a lot more maintenance?

    #2
    I would be wary about buying something at the other end of the country and I got ourmt of ghe student market a few years ago as there was too much management for the returns. Most student landlords at the moment probably wish they had done the same.

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      #3
      This market is ideally targeted at those who have the requisite amount of money to buy outright as there is no appetite amongst lenders for lending on such units. Take into account Service Charges / Ground Rents maintainance cost and management fees on student turnover will make the economics somewhat challenging with restricted potential for capital growth.
      Keep your money for good quality two/three bed properties which have appeal to both homeowners as well as good family lettable units.

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        #4
        And when politicians start realising (as they will do) that only 10% of the population should be getting decent degrees, instead of 75% getting nonsense degrees -- and when the Chinese students stop arriving -- the whole student lettings market will be radically changed.

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          #5
          Originally posted by dan223 View Post
          with apparently 8% yield guaranteed for 3 years?
          They wouldn't offer this if they thought the flats would sell readily without

          Comment


            #6
            Originally posted by loanarranger View Post
            This market is ideally targeted at those who have the requisite amount of money to buy outright as there is no appetite amongst lenders for lending on such units. Take into account Service Charges / Ground Rents maintainance cost and management fees on student turnover will make the economics somewhat challenging with restricted potential for capital growth.
            Keep your money for good quality two/three bed properties which have appeal to both homeowners as well as good family lettable units.
            Agree 100%

            Quick search and I found some in Sheffield. Website specifically says cash purchase. If the lenders won't lend on it, there's a good reason.

            Comment


              #7
              I suspect they can't give them away at the moment.

              Comment


                #8
                Thanks for the feedback guys, I will stay clear of them then! For 50kish a cash purchase is possible, but even then it sounds like it is probably not the best idea.

                Comment


                  #9
                  dan223 , remember Fools and their money are soon parted. This is a type of investment which should be avoided just like Covid19

                  Comment


                    #10
                    Originally posted by Beswick View Post

                    Agree 100%

                    Quick search and I found some in Sheffield. Website specifically says cash purchase. If the lenders won't lend on it, there's a good reason.
                    Sheffield is one of those places that is going to be particularly hard hit. They have catered heavily for the overseas market, and have built a mass of pokey nasty city apartments that families and more sophisticated students hate. For not much extra non-boozy students want to move to the leafy suburbs.

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