How to Succeed in Student Property - Tip 4:  Deciding if Student Room investment is right for you..

Posted by Graham Turrell on Tue, Dec 05, 2017 @ 10:28 AM

Student room ownership through Purpose-built Student Accommodation can provide some interesting returns from rental income, but they're certainly not for everyone.Here's a handy checklist and some expert notes to help you decide if they're right for you.

So why not sit down with a nice cuppa or a sandwich at your desk, and ask yourself ...

Is hands-free income appealing to me, or do I like to be in full landlord-style control of my property?

PBSA_Studio_Interior.jpg

For active landlords, managing and improving their properties is part of their "job" and they embrace and on the whole enjoy it.

Purpose-built student property (or PBSA) on the other hand is by necessity managed entirely by expert specialist facilities management companies. Having research the investment, PBSA investors are satisfied that the management company know exactly what they're doing and to let them get on with it. If you think you'll have "ants in your pants" at this and would want to be involved in the running, furnishing, tenant finding, refurbishing, then PBSA is definitely not for you - because you simply can't do that!

Do I have the time to regularly keep an eye on my property or do I prefer to set and forget?

Those with the considerable time and inclination to be a landlord have the choice of whether to spend it on their properties. For those who simply cannot spare the drain of time in their busy lives to run a buy-to-let property portfolio, PBSA probably wins hands-down.

Is my investment background primarily property ownership or mainstream investment such as stocks and bonds or companies?

PBSA In many ways sits between the two. You have the benefit of ownership of physical property assets with the advantage of being able to sit back and enjoy the income. However, property is not a liquid asset like stocks and shares, and your capital is tied up in the asset. Admittedly you can sell the asset but this would take time. So what are you comfortable with?

Am I able to pay for and own the property outright (typically £50k-£75k)?

Off-plan PBSA is predominantly a cash purchase, although we do have access to a lender willing to look at offering a mortgage, subject to status and the PBSA development itself.

Am I looking primarily for income or capital growth?

PBSA should be considered primarily a long-term reliable income generator. As it is effectively commercial property, its value is based on achievable rental income, which will rise steadily with inflation over the years. Don't expect residential-style price movements (either up or down). As leverage (a mortgage) is not available at purchase, high percentage capital gains should not be realistically expected and will likely not be the key reason you invest in PBSA.

Do I enjoy researching property investments?

    1. There is a little more upfront research to do with PBSA that with buying buy-to-let, especially if this area of property is new to you. But as a fully-managed and maintained asset, the rewards of time-saving come quickly.
    2. Whether you do or you don't, seek out a good partner who can help you with your research (it's what we and other top-notch investment property brokers will do for you). 

Am I willing to retain the asset for at least 5 years?

If you think you may need your invested capital back at short notice, then at this stage of your investment life, direct property investment of any kind including buy-to-let and PBSA, is probably not for you, sorry. Property Bonds may be more suitable though, take a look at our blog topic on that subject.

If you still think you're the right type of investor for Student Property, take a look through our Student `Property market Industry Report, to discover the strong case for investment...

 

Download Student Property Market Review 2016-18 

Tags: Property Insight, pbsa

How to Succeed with Student property - Tip 3 : The subtle art of comparison !

Posted by Graham Turrell on Sat, Dec 02, 2017 @ 10:22 AM

They say that size isn't everything , but for investors when it comes to student rental income it's usually at the top of every list. But how can you confidently predict what that income will be from what is currently still a construction site? Fortunately help is at hand...

graduation-day-hats.jpgThe vast majority of PBSA on the market are offered to investors "off-plan" which means agreeing to purchase a property before its built and therefore before it has a track record of being a successful student development. The rewards for this include relatively low purchase costs and usually a good selection of student rooms to choose from .. off the plan.

But without a proven income from the development, how can you be satisfied that your investment is going to give you the income you expect and have been "promised" by your sales agent?

The answer as usual is to do your own homework but seeking out the closest established student halls, closest in a number of ways. When choosing your comparisons, consider:

  • Location - proximity to the development you're considering
  • Age and design
  • Target audience (Undergraduate, overseas, postgraduate)

Often the developer will provide you with a set of income projections. That's fine, but scrutinise these for accuracy. Ask yourself:

  • Are these sufficiently detailed - is there a spreadsheet breakdown of costs and rental income, or just headline figures with little or no justification?
  • Do these figures come with citations or references to justify them?
  • Can the figures be easily verified?

The more data the developer or agent provides you on request the better: it shows there confidence in their development and their commitment to you as a serious investor.

Where this isn't immediately to hand, all is not lost. Comparative data can be obtained by desktop searches, speaking to university accommodation offices and speaking to the student management company that has (hopefully) already been signed up to run the development.

Armed with this data and some nifty spreadsheet work it's then much easier to make your own realistic projections on income and see how this squares with the developers' own.

When HighGround looks for a suitable student hall to offer our investors, we carry this out as a matter of course, regardless of the volume of figures given to us by the developer. We insist on independently checking every assumption to our total satisfaction before we offer it to our investors.

If it doesn't stack, we reject the development. But hey that's just us.

Find out more about why UK student rooms remain so popular with investors. Here is a great introduction, backed up by some solid facts and figures. Download our Student Property Guide today:

Download Student Property Expert Guide 2017-18

  

Tags: Property Insight, Student Accomodation

How to succeed with Student Property - Tip 2 : Look Beyond the Headlines

Posted by Graham Turrell on Tue, Nov 28, 2017 @ 09:09 AM

Welcome to our second post with tips on what to do when considering purpose-built student property investments.

You've likely heard the phrase "if it seems too good to be true, it probably is", right ? (I could spend a whole book chapter unpacking that piece of received wisdom, in fact I shall do soon - it's fascinating !).

Being objective

But objective investment research requires put aside the scepticism as well as any giddy excitement. It's a stoic activity, but one we all find difficult to some extent, as most buying decisions involve emotion at some level !

canterbury_hall_lounge.jpg

When it comes to a passive investment such as buying a student room in Purpose-built Student Accommodation (or PBSA for short), one should approach the claims of the property developer or agent with a curious mind.

Here's an example: "Fixed returns of 6% for 5 years". These terms are often offered by the developer as an incentive to buy the student rooms. This is a reasonable idea as it provides some comfort for the buyer whilst the student hall ramps up to speed in the first few years of operation.

That said, these offers are largely irrelevant for well-run new halls, as good student facilities companies of halls built in the right location should enjoy full occupancy at market rent from opening. It can however, mask problems with poor location and bad management

So, as an intelligent investor, here are some key questions to ask yourself:

  1. is the student hall in the right town or city, and the right location?
  2. is the student demand there? - some good signs are: investment being made into university facilities and infrastructure; an excess of private student houses of multiple occupation; strong postgraduate programme; growth in local student numbers over the last 5 years.
  3. looking at similar private or university-run halls in the area, do the rents match the estimates provided by the developer's estate agent to the investor? Get out the spreadsheet - real numbers reveal the true story!
  4. does the company set to manage the hall have a strong, long track record of experience with running student halls and advertising them to students to drive the best rents and highest occupancies.

Intelligent investment involves looking beyond the juicy headline figures, being neither carried away by them nor dismissing them out of hand.

Black and white or shades of colour?

Investment due diligence seeks to simply get to the truth and make an informed decision. It's harder work than just accepting or rejecting the headline figures, but ultimately far more helpful.

At HighGround Property, we operate unusually detailed due diligence on every student hall investment we consider and, as a result tend to reject around 80% of all investments that appear on our desk. Only those that pass our exacting standards are one's you'll see from us.

Our classic example of the moment is Canterbury Hall  service the UNiversity of Central Lancashire in Preston...

Canterbury Hall Preston Investment Handbook

 

Tags: Property Insight, Student Accomodation

Property Investors: why you should follow the UK Government money

Posted by Graham Turrell on Fri, Nov 24, 2017 @ 05:29 PM

In this week's November Budget, the UK Chancellor has left us in no doubt - punish landlords and reward property developers.

Warning: this is a lengthy but important post. If you are at all involved in property investment, or thinking about it, read on.

philip-hammond-nov-budget-2017.jpgBuilding good, renting bad

The UK Chancellor Phillip Hammond this week made it very clear that a key objective of this government is to build houses. And build at a rate last seen in the 1970's. Substantial funding and support is being offered to developers to build the 300,000 annual homes construction targets. We applaud this but we as investors need to adapt - and quickly.

This government strategy includes continued support for corporate "Build to Rent" (B2R) developments, which we believe puts further long-term pressure on small private landlords to compete and make a living.

"Hooray! It's not worse"

Some commentators are suggesting that because no further punitive measures have been placed on Landlords this time round, this is to be celebrated. Unfortunately the reality is, in the last two years so much damage has been done the message to private BTL investors is sadly clear: "you're not welcome".

I'm of course talking about:

  • the 3% Stamp Duty surcharge for second homes (primarily affecting buy to let investors trying to grow their businesses);
  • the devastating changes to taxation of mortgage interest for private landlords;
  • the emergence of trial rent controls (expect this not to go away!);
  • the "demonisation" of landlords in the media;
  • the growing frustration of Generation Rent desperate to get on the housing ladder.

So it is clearly government policy: we can expect to see the rise of many small and medium-sized property developers, and the decline of small-scale private landlords as they are forced out financially and replaced on the whole by (albeit largely middle-class) first-time buyers.

The problem is that development funding is today still hard to find, and despite government money, this is likely to remain a major bottleneck for getting builders to build. The need for private funding for developers through crowdfunding, property bonds and good old-fashioned joint venture partnerships is going to become more important to the government vision than ever before.

"Whatever your political view on this, it would seen very sensible for property investors to recognise this sea-change quickly and look to either build property, or finance those who do."

Which team would you rather be on - the aided or the persecuted?

It is time for landlords to review their long-term strategies, especially if they do not currently include adding "asset value" by developing, extending or carrying out major refurbishments. For a growing number of property investors, buy-and-hold residential letting is no longer the Holy Grail it used to be, and may never be again.

In the light of government-backed "landlord persecution" some landlords have pledged to sell their portfolios, but may have no clear plans where to invest the profits.

As a business, our focus is set firmly in line with the government camp, at least as far as supporting development is concerned. We support small developers by connecting them with investors large and small through Property Bonds, Crowdfunding, and other collaborative ventures such as student room ownership in new purpose-built student accommodation. We have been doing this for a decade and long before it was fashionable. We believe in wealth creation through property now more than ever.

Here's one example of how investors can profit from great UK property developers today. It's possible to invest in midlands-based Godwin Capital from just £5k and enjoy double-digit fixed annual income through property plus your capital returned in two years. All without the need to lift even a hammer.

godwin capital no 2 brochure download

Tags: Property Insight, Property Bonds

[property bonds] Why are Bonds growing in popularity with investors and developers?

Posted by Graham Turrell on Thu, Nov 02, 2017 @ 05:09 PM

 

7-shutterstock_288113666.jpgWith us living longer, pension funds are not giving many of us the financial future we planned for, and other ways are often sought to grow financial nest-eggs to top up that future income. Bank savings accounts aren’t delivering on that either.

 

So is there a place in a portfolio for Property Bonds - for those of us that would rather be the lender than the property developer?

With good Property Bonds, you team up with an established property developer in a Joint Venture. But there are none of the set-up costs for the bond holder that you would normally associate with a direct property development project, or the advisor fees that come with buying traditional regulated investments: all of your capital goes to work for you.

Here are a few other key reasons to consider profiting from Property Bonds:

  • Property is seen as a secure asset class and with not enough homes being built in the UK demand continually outstrips the supply.
  • There are more and more obstacles in directly owning investment property. Heavier taxation for residential investment property and reduction of tax reliefs for expenses; difficulty in raising mortgage finance for buy- to-let; dealing with tenants; licensing; regulation, the possibility of rent controls; the list goes on). Many property investors are looking for less hassle and more profit: being the lender, not the landlord.
  • As part of this movement, investors who are cash-rich and time-poor are looking to partner with developers by lending rather than getting directly involved in the day-to-day running of projects.
  • In uncertain economic times a predictable fixed income for a known period of time has much appeal.
  • Whilst no investment is risk-free and they're not for everyone, a well-chosen Property Bond can offer credible security and a practical exit strategy should things go wrong with the developer.

Learn how to spot a good property bond, and those to avoid. All this and more is covered in our Property Bonds guide - grab your copy today:

Download HighGround Property Bonds Special Report

Tags: Property Insight, Property Bonds

[Property insight] One thing remains stable in the UK - investors still vote for Property

Posted by Graham Turrell on Fri, Jun 09, 2017 @ 07:08 AM

As we wake this morning to yet more political uncertainty in the UK with the likelihood of a hung parliament, it's reassuring to remember that UK property investment has shown itself ultimately unshakable even in times of uncertainty.

Election-920x584.jpgProperty, this remarkable asset class, has historically weathered every political and economic storm that has battered the UK's shores in modern times. 

The reason - that we all need a roof over our heads - seems obvious but also reassuring. Reassuring that despite the posturing of the political classes as we see in government now, despite the political attacks on landlords to win votes, the value of property continues to thrive. Not just monetary value, but value as a nest egg for individuals, couples and families simply trying to provide a comfortable retirement for themselves and their loved ones through property investment.

No waves battering the shore of Britannia are ever likely to shake the security and comfort of property portfolio ownership.

Check out one of our most popular additions to any secure and stable property investment portfolio, whether investing from the UK or globally. 

Property Bonds provide fixed income secured through property, with the comfort of return of capital in full after a fixed time period. Their relatively low cost allows even the small investor to build a diverse portfolio and spread their capital over a range of property opportunities. Download our Property Bonds guide to discover more.

Download HighGround Property Bonds Special Report

 

Tags: Property Insight, Property Bonds

[property insight] Busting some passive property investment myths

Posted by Graham Turrell on Mon, Apr 24, 2017 @ 08:12 AM

The idea of making property investments passively can cause a great deal of confusion - what do we mean by passive investment through property anyway?

www.reuters.com.jpegLet's bust a few myths -  here's what we think:

1) Passive investment through property is not about laziness. It takes a ton of research upfront on an what could be a long-term investment. Only when the hard work of due diligence is done and the investment made can the investor sit back. 

2) it's not for everyone. It's not for those that spend all their waking hours living and breathing property as property developers or landlords. We love you, but we know you're more likely to be seeking funding than wanting to invest in other things right now! These dedicated souls need to keep their hands busy and if they're doing it right should expect the fruits of their labours to reward them handsomely eventually. This is less true for UK residential landlords than for developers these days, and some are completely changing the way they invest in property as the world changes around them.

3) Having complete control of your property investment does not guarantee success. There's no such thing as a risk-free investment, and the unexpected can bite you if you put all your eggs in one basket. If you're a landlord you're probably invested heavily in one "property paradigm" which, when attacked by government policy (as as happened recently in the UK) can have a devastating effect on your whole portfolio. Consider "targetted diversification" when you invest. Be an expert in your field but have plenty of strings to your bow.

I'm passionate about helping property investors move their investment strategy forwards with a clear plan for the future. So if any of this resonates with you, I'd like to chat with you privately and with no obligation or "hidden agenda". 

You can simply pull up my diary and book a complementary call with me right here. Speak soon!

     Let's talk !     

 

Tags: Property Insight

What does a good Property Bonds look like? The typical structure…

Posted by Graham Turrell on Mon, Apr 17, 2017 @ 09:05 AM

working-as-a-team.jpgWith any investment  it's crucial to look beyond the headine figures and take the time to "look under the hood" as well. This is very much the case when it comes to Property Bonds.

The key players you should expect to see in a good property bond offering are:

A capable, experienced property development team with a strong track record of successful projects of a similar nature.

A legal team to:

  • Draw up the agreement between Bond Issuer and the developer, and the agreement between the Bond Issuer and the investor. 
  • Operate the Escrow account and ensure that all funds transferred between it and the developer are secured by developer’s assets.

A specialist administrative team to manage the payments to investors.

A Bond Issuer company with a strong track record of successful projects to:

  • Act as the intermediary between investor and borrower.
  • Independently represent the investors’ interests.

Some property developers with little or no understanding of investors needs, will try to do most or all this in-house usually cutting plenty of corners in the process. When you see this, run for the hills.

Learn how to spot a good-looking property bond, and those to run away from. Download our bonds guide today:

Download HighGround Property Bonds Special Report

Tags: Property Insight, Property Bonds

[Property insight] Reasons to be cheerful about property investment in Preston

Posted by Graham Turrell on Mon, Jan 30, 2017 @ 02:11 PM

Equipped with a competitive cost base and good location near to Manchester and Liverpool, Preston is the engine room of Lancashire’s economy and one of the largest local economies in the north of the UK.

Preston-2.jpgPreston has been reinventing itself since the year 1179 and continues to do so.

With the government’s economic strategy using cities to drive regional growth, it received an enormous boost to its economic growth aspirations with the recent announcement of the Preston, South Ribble and Lancashire City Deal:

  • £430 million directly invested into central Lancashire.

  • Expansion of transport and business infrastructure around Preston.
  • Creation of 20,000 new jobs and 17,000 new homes
stimulating a further £2.3 billion worth of local investment. 

Preparations have already begun to catalyse economic growth in Preston. The building blocks for further growth include:
  • BAE’s £12.4 million investment program at the Lancashire Enterprise Park. 
  • Lancashire Enterprise Zone – will attract 13,000 high value jobs and be one of the largest manufacturing hubs in Europe. 
  • European Social Fund training programme for 4,000 young local SME employees. 
  • Lancashire Growth Hub - a specialist business advice centre.
  • University's 36,000 strong community of students and professionals, contributing £300 million to the local economy annually.

Preston is all about economic growth through inward investment. And as the city's largest employer, the University of Central Lancashire (UCLan) is right at the heart of this, with a recently announced £200m investment including a brand new £30m Engineering Innovation Centre.

Property investment that leverages this growth is going to be of great interest to educated investors. 

Exciting times for Preston, and as the saying goes ... follow the money!

Here's a powerful way to take advantage of this growth, in the property asset class where demand continually outstrips supply...

Innovation House Preston Investment Prospectus

Tags: UK Investment, Property Insight

[news] Property Tax War Room - why being informed is half the battle won

Posted by Graham Turrell on Tue, Dec 06, 2016 @ 12:12 AM

Our Westminster Seminar 'War Room' Survival Strategies for Property Investors on the "hot topic" of how changes to UK property tax may seriously affect the future of most landlord investors, really hit the spot...


Graham Property Tax 1.jpgSome property investors know of the potential massive hit to profitability coming their way starting as soon as April 2017 and a few of these have already taken steps to minimise the impact.

At the same time, though,  the majority of property investors  in the UK are not even be aware that unchecked, these sweeping changes could potentially wipe out their buy-to-let business.

Being informed is half the battle won. That's why I and two other property and tax experts recently brought together property investors to Westminster from all around London and beyond to "tell it like it is" - and to offer some intelligent, practical solutions.

The response from the audience showed that we'd really hit the spot. So for all those that couldn't be there on the night or missed out on tickets... I like to share our ideas with you in three ways ...

To request a copy of the presentation, gain access to key video clips from the seminar, and speak to me about your property investment plans, just click below you can access my diary and book a property investment review at a time of your choosing. I want to give you real value and as this is so important I'm waiving my consultancy fee -  there's no cost to you whatsoever.     Let's talk !     

 

 

 

 


Tags: UK Investment, Property Insight, Property Investment, News, Property Bonds