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New to property investment

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John15

New Member
Can someone please guide me in property investment as I am very new and inexperienced in this field?

I have very little savings which I am thinking of investing in buy to let property. With my savings it is difficult to find buy to let property that cover 25% deposit and after long search I have managed to find some studio apartment inside student hall in Birmingham exclusively for renting students and those apartments are managed by the university or other third party private company.

Those apartments have shared kitchen with own bedroom with ensuite with long lease.

I was told by the selling estate agent that there are approximately £3000 per annum charges on those apartment including ground rent, service charge and full management fees including finding student.

The rent will cover the cost of interest only mortgage, ground rent, service charge and management fees.

My goal is to sell this property back in 5 -10 years time for profit. . Do you think it is worth investing on those properties? If I have to buy normal property, it will take me another 2 to 3 years to save deposit.

Those properties are very cheap and affordable for me and am wondering if there are any loopholes although selling agent will not disclose any information. Has anyone had any experience or knowledge?
 
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FWL

Member
I would be wary as it seems as though you have no control over the studio flat you are looking at? If you could find a more traditional property you could rent out yourself and save some significant fees. Without more detail it is difficult to advise what I would do in your situation.
 
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John15

New Member
Thank you for your reply. Yes, you are quite right that I will have no control over the flat as it will be fully managed by university and they will set up their own management fees which is around £3K per annum and rental income will be around £5K per annum.

I am actually looking for long term investment and regular rental income from property as I am planning early retirement in about 12-15 years time and at present I don't have enough deposit for traditional property. It will take another 2 -3 years to save deposit to buy traditional property but price of those properties may go up.
 
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realdeals

Active Member
One quick question, what happens to your income outside of term time? A lot of students go home during this period.
 
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John15

New Member
I haven't thought about it. I need to find out more from selling agent.
 
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lookinginvest

Member
My advice @John15 would be not to rush in and I would personally be uncomfortable investing in a property but effectively having no control over it. Just doesnt sit right with me but I can see many new investors being sucked in by this idea of easy money.

There is a mentorshiop service by the owner of this site which you can find at:-

https://nicholaswallwork.com/mentorship/
 
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Longterminvestor

Administrator
I think it is better to take time to study the industry before you jump in with deals which can on the surface look too good to be true. As long as your know the detail you can make your mind up but it you dont know what to ask.....
 
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Moghalqureshi

New Member
To be very honest, I am not any professional either but I will say a lot of things are based upon common sense rather than expertise. So one of the common things I would say is to keep in touch with us housing market predictions, as it should give you the facts as what your next step should be. While another important aspect is to ensure that you are not entirely depending on just one property with it, as it should get you stuck.
 
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diyhelp

Active Member
I was just wondering, do you own your own property?
 
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lookinginvest

Member
When all said and done, the student accommodation market is huge and if you are careful you should be able to create a good long term income stream and hopefully some decent profits.
 
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Longterminvestor

Administrator
A hands-off investment is not a bad way to start but I would still advise doing your research so that you understand the market, terms, etc a little better.
 
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carol1

New Member
If anyone of your family is older than 55 years?? If any 55 years or older people present then tell them to apply for equity release. It is helpful too. By this policy you can invest your property safely.
 
F

FWL

Member
Just thinking out loud, is there a forumlae in the ownership documents about the ground rent and the service charge and how much they will increase each year? This is potentially the next huge mis-selling scandal, the massive increase in ground rents year by year.
 
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Joshua Baines

New Member
Hi John,
My advice to you would be to use a deal sourcing company, they will be able to find a property that will suit your budget and guide you through the process.

I hope this helps,
 
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Longterminvestor

Administrator
I wonder if we will see students defaulting on their rents in light of the ongoing coronavirus crisis? Where do investors in guaranteed rental schemes stand then?
 
Veronica

Veronica

Administrator
That's a good question as I know there are many foreign students who are trapped in the UK during this crisis as their home countries are not allowing flights to come in from the UK other than to repatriate Uk citizens. Cyprus for example. Cyprus mail online has many stories of students who desperately want to be with their families at this time but they are trapped in their student accommodation in the UK.
 
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PostBrexitInvestor

Member
On the surface the comment about student accommodation does seem a little callous but in reality, if private landlords were to fail and go under where would the students of tomorrow live? This coronavirus issue is going to throw up a whole lot of challenges even when it is over.
 
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Ethan Sanders

New Member
Have you considered crowdfunding investment? I think it is an appropriate way of investing for those who don't have much money...
 
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Longterminvestor

Administrator
I have seen a number of articles about crowdfunding and it seems, for many people, to be the perfect way to get a decent spread of investments for a relatively small amount of money; Have you used crowdfunding @Ethan Sanders ?
 
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