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Buying purpose built student accommodation

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Shadow

New Member
Does anybody know of the pros and cons of buying a unit in a purpose built block of student accommodation?

Given that the income yield is high, what is the capital gain potential for this type of investment on resale?

Regards

Shadow
 
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tmash

New Member
Does anybody know of the pros and cons of buying a unit in a purpose built block of student accommodation?

Given that the income yield is high, what is the capital gain potential for this type of investment on resale?

Regards

Shadow
This type of investment is exempted from capital gain tax on selling the property if its a SIPP(Self Invested Personal Pension).There is no tax to pay as well on rental income.
 
S

Shadow

New Member
Thanks for the reply, however what I'm after is the capital gain potential on this type of property, not necessarily the capital gains tax liability.

An ordinary BTL will increase in value (hopefully, in normal market conditions) what is the upside on this type of property and how easy would it be to sell in the future?

Regards
 
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Lysos

New Member
tmash,

Where did you find information that there is no income tax to be paid on rental income ?. As a UK taxpayer you are liable for tax on all your income wherever in the world it is derived.
 
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punitalemon

New Member
yourcityoffice

As per my knowledge it is compulsory to pay income tax on rental income.
As a UK taxpayer you are liable for tax on all your income .
 
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JamesRoberts

New Member
Does anybody know of the pros and cons of buying a unit in a purpose built block of student accommodation?

Given that the income yield is high, what is the capital gain potential for this type of investment on resale?

Regards

Shadow
Any capital gain on a student specific property will simply have a couple of additional factors to consider. Namely how well the nearby college of university is performing and how popular it is. If it is an expanding college with money being spent on it, demand for courses is likely to be higher and more students will want to attend. If it is poorly maintained and not regarded well, the reverse I would suggest could be expected.

The surrounding area and the development of it will of course still impact the property values in the same way they would with a "normal" property.

Of course there is one other possible spanner in the works to consider, and that would be any changes in student funding. If that rises or drops, then there would likely be an impact further down the line.

With student specific accommodation you do have the double edged sword of the captive market. Students need to live somewhere, and have (although sometimes limited) money to spend. Your rent is secure to an extent with terms and so on, and there is a lot of natural marketing from the student unions and the universities themselves.

On the downside, if the accommodation is restricted to student use only, if the university begins to get a bad name or low attendance, then you are a bit stuck unless you can get change of use.

Not a definitive answer I know, but hope it gives you an insight into the possibilities!
 
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mortagage

New Member
Just consider also the expected drop in student numbers when the 2012 fee increase hits.
 
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mhean26

New Member
If the place is near the school then the chances of earning is really good. However, the capital is large since there are many safety built to be followed.. hope this one relates to the topic..
 
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Katodapa

New Member
You would probably get more out of your investment if it was a property which was not just for students as you are dismissing a huge number of potential renters such as famiiies, young professionals etc..
 
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mortagage

New Member
Absolutely, the young professional has huge economic power - just makesure it's in the right area.
 
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jtrader

New Member
Student accomodation is notoriously bad quality, find a good site and good devleloper and managing agent.
 
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AnnH

New Member
I agree with Katodapa. Don't do it only for students. It helps you attract more potential renters.
 
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EthenGroom

New Member
Hi

Thanks so much for the above tips. They are so informative
 
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ingram62

New Member
Where is it, there is a shortage of Student Accom. in many areas, it should be in one of these.
How long has it been operating as Student Accom.
What are the occupancy rates like & also the maintenance.
Some areas you can get the Students to pay for the full year other, other areas they pay per term.
Some contracts get a houseowner to be the guarantor.
Due all your Due Diligence on the unit first.
 
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Bigtowers

New Member
I'm just new here so I can't say much more about the stuff. I'll be definitely come back here. Keep it up.
 
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Michelle Barringer

Member
Forum Partner
Good student developers are now building with res planning as well do help to future proof the investment and many are now selling Cluster apartments - so they could be used as HMO or easily converted into an apartment if required in the future.
 
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sergerybrin

Member
The place for accommodation should be near to school or college, it's easy for all of the students.These all tips are good for students accommodation near the place that they want.
 
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nmb

Well-Known Member
There is no doubt that student accommodation today is very different to that of 20 years ago and the facilities could not be further apart in quality. This is why student accommodation is one of the biggest growth markets in the real estate sector with very attractive yields and potential for capital growth. The introduction of student fees was inevitable at some point although many people seem to be ignoring one other very important factor, the ever-growing number of overseas students looking at countries such as the UK.
 
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