How to Succeed in Student Property - Tip 5 - Understand about capital growth and exit

Posted by Graham Turrell on Fri, Dec 15, 2017 @ 10:27 AM

As we've seen, purpose built student property can offer consistent rental income that buy-to-letters can only dream of - when the right development is chosen and invested in. But the question that so often comes up is ...

"what if I want to sell the property later?"

A fair question because unlike with regular buy to let property, there is generally no residential resale market: your potential buyers will all be property investors. This is because purpose-built student accomodation (PBSA) can only be occupied by students - there will be a covenant or equivalent on the property deeds to stipulate this.

Not your regular property market


Without a residential resale market, the future value of the apartment is likely to differ from an equivalent residential development. As the buyers are investors, the property value will be determined in a very similar way to traditional commercial property, where that value is based almost exclusively on the Yield - the achievable student rental income from the property.

This commercial element to the investment is often seen as an advantage over the rises and falls in popularity of the residential property market and somewhat easier to predict on a spreadsheet. For that reason too, PBSA can offer a convenient "hedge" to have inside a traditional buy to let portfolio. 

OK, so more about this "usage thing"...

Only students can live in your property. There are advantages to this occupancy restriction though: officially-designated purpose-built student property is treated as a special case by the UK Government, with potential tax advantages for the owner. For instance it is exempted from the recently-concocted Second Home Stamp Duty Surcharge, which for buy to let buyers with a residential property already, adds a 3% hike on to their SDLT bill.

How to resell your student property

Student hall property has traditionally been the domain of buy-and-hold strategies, and those investors planning to hold their property as an income cash-cow for the long term had not been especially concerned about selling. 

The good news about resale though is that what was once a very niche property marketplace with just a few student developments, has in recent years exploded in the into the most popular specialist property market in the UK. Many estate agents with significant property investor databases now recognise the secondary (resale) market and it is MUCH easier to resell a good student room property.

And a part of that market prefers to buy room in halls with a few years track record under their belt. So provided you choose to invest in the a new-build student hall that ticks all the right boxes, the ability to sell you property on is perfectly possible, with some capital growth to boot.

Many investors have gone on to build substantial portfolios of purpose-built student property and as confidence continues to build on the success of the market this is set to continue.

Growth tips from the trenches

The secret to building any successful property portfolio is doing your research when you buy, and this is especially true of student room investments. So become your own purpose-built student property expert, and learn the right questions to ask the developer before making a decision to buy. Use an agent, broker or consultant with as much experience in this field as possible, and pick their brains mercilessly!

For example our team purchased their first student room investment way back in 2005 when the market was in its infancy. Whether you speak with us, or any other excellent, experienced agent about student property, make sure they're independent and as unbiased as possible towards the developer or the development. Above all you need to trust that they have your interests at the heart of all they do. 

With our ten years' experience, we carefully select every development we offer and are beholden to none. If we aren't 100% satisfied, we won't offer it, period.

A great example

Here's Canterbury Hall, our current favourite with just a few suites now remaining to buy. If you would like, drop me a line and I'll be happy to go through why we think it's the best of breed right now to add to your own portfolio.

Canterbury Hall Preston Investment Handbook 

Tags: Student Accomodation, Canterbury Hall

How to succeed with purpose-build student rooms - Tip 1

Posted by Graham Turrell on Tue, Nov 21, 2017 @ 11:50 AM

There's no denying the success of Purpose-built Student Hall Accomodation in the UK. Demand for quality student living is still constantly outstripping supply, even as the number of new builds grows and competition between them is getting tougher.

canterbury_hall_roof_garden.pngIn this new era of student choice, it's more important than ever to have the facilities that students actually want to use and frankly "beat up" the competition with them.

These days we are seeing "student magnates" for helping the students - and crucially their parents - choose their digs. And that more often than not means comfort.

If the student apartment or block you own offers features like ...

  • self-contained apartments (no sharing kitchens, thanks!);
  • services - local newsagents and hostelries;
  • bragging rights - gyms, cinema rooms and even private roof gardens

... then you're onto a winner. That property when rented out by an experienced student facilities manager, is going to enjoy the highest possible rental income and occupancy (and therefore property value), for many years to come.

Shameless plug - here's a perfect example of what I'm taking about, UCLan Preston's Canturbury Hall, and a small number suites are still available to a few more property investors (I will be sold out very soon now). Not hard to see why.

Have a look now, and get in touch quickly if you would like to know more.

Canterbury Hall Preston Investment Handbook


Tags: Student Accomodation, Canterbury Hall