Student accomodation: 8-10% yields
Discussion
http://www.emergingproperty.co.uk/ads/scholars-vil... just popped into my inbox from the RLA (Residential Landlords Association)
Investment highlights:
Investment highlights:
- 8-10% NET fixed yields: every year for 10 years (8% (years 1-2), 9% (years 3-4), 10% (years 5-10))
- Immediate income
- 250-year leasehold ownership
- Yield-driven capital growth
- Zero additional costs for 10 Years
- Available from £46,950
- Professional management company
hab1966 said:
http://www.emergingproperty.co.uk/ads/scholars-vil... just popped into my inbox from the RLA (Residential Landlords Association)
Investment highlights:
What are these going to be worth at the end of year 10?Investment highlights:
- 8-10% NET fixed yields: every year for 10 years (8% (years 1-2), 9% (years 3-4), 10% (years 5-10))
- Immediate income
- 250-year leasehold ownership
- Yield-driven capital growth
- Zero additional costs for 10 Years
- Available from £46,950
- Professional management company
Behemoth said:
Virtually no secondary market. It's not the same as trying to sell a leasehold flat or freehold house. More like trying to sell a hotel room. If you think property is illiquid, this is x10.
I had wondered how you would get out when you need to. Also what the costs are after 10 years.Not for me, but i did wonder what the catch(es) were.
We manage 300+ student spaces in Exeter varying from 2 bed flats tp blocks with 70+ students. For myself I am going down the 2 bed flat route
Buy for £150,000
Rent £140 per week x 2 x 48 weeks=£13,440
Deduct utilities (we control the heating…times on and off) tenants control the TRVs on the radiators so you don’t get heating on 24/7 all windows open. LED lighting. Utilities at worst £1000pa.
The beauty is if the student market were to fail due to oversupply or something these flats can be let to civilians at about £750 per month. Also I know by January each year (e.g 2016) that I have income until august 2017 as the students sign up in January for occupation in September.
It also means if I want to cash out I can do so one flat at a time
Buy for £150,000
Rent £140 per week x 2 x 48 weeks=£13,440
Deduct utilities (we control the heating…times on and off) tenants control the TRVs on the radiators so you don’t get heating on 24/7 all windows open. LED lighting. Utilities at worst £1000pa.
The beauty is if the student market were to fail due to oversupply or something these flats can be let to civilians at about £750 per month. Also I know by January each year (e.g 2016) that I have income until august 2017 as the students sign up in January for occupation in September.
It also means if I want to cash out I can do so one flat at a time
Rangeroverover said:
Deduct utilities (we control the heating…times on and off) tenants control the TRVs on the radiators so you don’t get heating on 24/7 all windows open. LED lighting. Utilities at worst £1000pa.
Make sure you prohibit the use of plug-in electric heaters! Another thought is showers, I know of a student who has a 30-45 minute electric shower every morning, that would run up a considerable bill. (Amusingly they were in a private rental and paying the bills themselves...)
k is going to buy it without you guaranteeing the rent. Rangeroverover said:
We manage 300+ student spaces in Exeter varying from 2 bed flats tp blocks with 70+ students. For myself I am going down the 2 bed flat route
Buy for £150,000
Rent £140 per week x 2 x 48 weeks=£13,440
Deduct utilities (we control the heating…times on and off) tenants control the TRVs on the radiators so you don’t get heating on 24/7 all windows open. LED lighting. Utilities at worst £1000pa.
The beauty is if the student market were to fail due to oversupply or something these flats can be let to civilians at about £750 per month. Also I know by January each year (e.g 2016) that I have income until august 2017 as the students sign up in January for occupation in September.
It also means if I want to cash out I can do so one flat at a time
Can they be let to non students? From what I've seen no they can't it's student accommodation. Might be different what you have bought. Buy for £150,000
Rent £140 per week x 2 x 48 weeks=£13,440
Deduct utilities (we control the heating…times on and off) tenants control the TRVs on the radiators so you don’t get heating on 24/7 all windows open. LED lighting. Utilities at worst £1000pa.
The beauty is if the student market were to fail due to oversupply or something these flats can be let to civilians at about £750 per month. Also I know by January each year (e.g 2016) that I have income until august 2017 as the students sign up in January for occupation in September.
It also means if I want to cash out I can do so one flat at a time
If anyone wants the hassle of renting to students the returns are a LOT higher that those mentioned in the OP but so are the risks such is life.
BoRED S2upid said:
Can they be let to non students? From what I've seen no they can't it's student accommodation. Might be different what you have bought.
If anyone wants the hassle of renting to students the returns are a LOT higher that those mentioned in the OP but so are the risks such is life.
He is talking about buying regular proper that is in the right areas for students.If anyone wants the hassle of renting to students the returns are a LOT higher that those mentioned in the OP but so are the risks such is life.
I don't find renting to students hassle, I find them a lot less grief than a lot of non students. All my properties at the moment have Chinese students in. They sign up for 12 months lease, 5 months rent up front, they leave the flats a crappy dirty mess at the end of the tenancy, costs me £90 to get deep cleaned.
Rangeroverover said:
We manage 300+ student spaces in Exeter varying from 2 bed flats tp blocks with 70+ students. For myself I am going down the 2 bed flat route
Buy for £150,000
Rent £140 per week x 2 x 48 weeks=£13,440
Deduct utilities (we control the heating…times on and off) tenants control the TRVs on the radiators so you don’t get heating on 24/7 all windows open. LED lighting. Utilities at worst £1000pa.
The beauty is if the student market were to fail due to oversupply or something these flats can be let to civilians at about £750 per month. Also I know by January each year (e.g 2016) that I have income until august 2017 as the students sign up in January for occupation in September.
It also means if I want to cash out I can do so one flat at a time
ThisBuy for £150,000
Rent £140 per week x 2 x 48 weeks=£13,440
Deduct utilities (we control the heating…times on and off) tenants control the TRVs on the radiators so you don’t get heating on 24/7 all windows open. LED lighting. Utilities at worst £1000pa.
The beauty is if the student market were to fail due to oversupply or something these flats can be let to civilians at about £750 per month. Also I know by January each year (e.g 2016) that I have income until august 2017 as the students sign up in January for occupation in September.
It also means if I want to cash out I can do so one flat at a time
Rangeroverover said:
I don't want drama at cashout time
Who do you cash out these student flats to? Most of the ones I've seen are glorified halls of residence dressed up as a centre of town hotel. They were built to house students and are arranged that way with their communal kitchens etc. I can't see how you can ever separate them from the company operating them. Where is the secondary market? As for converting to "civilian" use if the student market falls on its face, I have to wonder how practical and realistic that is. There is an entirely different class of planning for student (essentially hotel) use vs residential / HMO. PBSA is not conventional residential housing, which is C3. With shared kitchens, common rooms, laundry etc it's closer to a hotel, which is C1. What's worse is that the planning treatment seems to be different for each authority. Maybe it all works where you are.
In London, a planning inspector passed a student block on the basis that
Planner said:
the rooms' main function would be for sleeping, due to intensive daytime activities taking place at the university campus. The lack of privacy, daylight and standard residential amenity, he therefore concluded, was unlikely to be perceived as overly oppressive by the occupiers.
Very good luck selling that stock on!Edited by Behemoth on Monday 10th October 18:05
BoRED S2upid said:
Can they be let to non students? From what I've seen no they can't it's student accommodation. Might be different what you have bought.
If anyone wants the hassle of renting to students the returns are a LOT higher that those mentioned in the OP but so are the risks such is life.
Yes they can as I am buying normal resi 2 bed flats that would rent to a civilian at about £650-700pcm. If something happened to the student market I still have a functioning asset; I wouldn't touch student only flats in student blocks.Due to the planners its just about the only thing being built as the choice for the developer isIf anyone wants the hassle of renting to students the returns are a LOT higher that those mentioned in the OP but so are the risks such is life.
Non Student
30% social housing
amenity space
parking provision
Student Only
None of the above
I have sold for clients flats in purpose built student blocks, a one bed and a two bed, return before expenses to the buyer about 8%.
Exeter is particularly bouyant, higher rents than Bristol
£160 per week for a studio
£155 per week for an en suite room in shared house (ex hotel)
48 week tenancies
Exeter is particularly bouyant, higher rents than Bristol
£160 per week for a studio
£155 per week for an en suite room in shared house (ex hotel)
48 week tenancies
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