Student accommodation pods have been heavily marketed in recent years as the ideal way to take an initial step on to the property investment ladder. The deals often sound very attractive and many amateur landlords are seduced by the idea of a guaranteed rental income with none of the hassle involved in managing a buy to let property. Many are sold as a ten-year investment with guaranteed rental yields, but are these deals really too good to be true?
Reasons to Invest in Student Pods
One of the main selling points of student pods is that instead of having to deal with irksome student tenants, landlords can buy a property and then hand over the day-to-day management to an agent while the money comes rolling in. Student pods are also sold as investments with great capital growth potential.
Disadvantages of Student Pod Investment
There are some considerable downsides to investing in student pods and investment specialists are warning landlords to take predictions of capital potential and income with a large pinch of salt.
Landlords Beware
Student pods cannot be bought with a buy to let mortgage and developers eager to sell often overstate rent predictions. There is also a large question mark over capital appreciation since student pods are typically leasehold and therefore their value will depreciate over time. In fact student pods are very highly priced when compared to other residential properties and have no re-sale value, so landlords need to consider whether such an investment is right for their needs before they hand over cash to a persuasive developer.
