For a relatively modest cash price you get a stake in the property market in a top university town and a guaranteed income – all without the hassle of having to manage a buy-to-let. That at least is the sales pitch.
University accommodation has changed beyond recognition in the past few years. Graduates in their 40s may remember slumming it in substandard digs, but today’s students have a much higher standard of living.
Developers are selling investors “pods” or studios that offer en suite rooms in luxurious city centre buildings complete with gyms and cafés. For their money, which can be as little as £40,000, investors are being promised a “rental guarantee” for a set number of years, with management of the property and finding tenants taken care of.
Some of the sales patter sounds highly alluring. Abacus Investor, for example, is selling Spectrum Apartments in Sheffield, with prices from £55,995. Investors are promised guaranteed returns of 8.9pc for five years. Vita Student offers investments across the country with a promised minimum 35pc net return over five years. RW Invest has pods on offer in Greenwich, London, from £82,500 with “10pc guaranteed income in year one and projected returns of around 9pc thereafter”. The list goes on.