Updating post from Reddit.
Long story short we can get a over 60's retirement flat below value
It has 3k service charge a year but has a great location and in great condition
But flipping it or renting out I have no idea because of the fact its over 60's
Any feedback or ideas?
You want to look very closely at the lease, it will restrict who can live there (and sometimes who can own it).
They are often not "below value" its just that is its value, given the small market for a home with that kind of restriction on it. You will also find it hard to finance given these circumstances.
Nevermind the idea that £250 of your rent a month will be going to the superior-landlord.
Unless it is a steal, i'd look at walking away.
No, you are not getting it below value - unless there are very unique circumstances like a distressed seller being forced to sell at a price which is lower than what very comparable properties have sold for in the very recent past
The value of an illiquid asset like this is what a buyer is willing to pay for it, not what someone thinks it should be
The value is lower than you might otherwise think because the property comes with loads of restrictions
I doubt you’ll be allowed to rent it out… check the T&Cs carefully.
These properties tend not to sell quickly, and that service charge doesn’t go away…
And only goes up
My in laws have been trying to sell one of these properties “below market value” for years. Nobody wants to buy them. I’d steer clear.
Managing agents like first port. English for Soprano.
Walk away. Lots of bad press about how retirement homes can become a nightmare.
Here’s just one - https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/hidden-costs-retirement-properties/
Don’t go near it: it won’t be below market value, will have numerous strings attached and restrictions and you will regret it.
Either find BTL house/flat in the normal sense; or put dosh into good savings.
I would strongly advise against these alt properties.
I bought 2 student pods in 2013 which are like retirement flats.
I strongly suggest that the below market value you have seen is actually above value. You need to consider where that value has come from, is it the seller or independent evaluations. My two pods are valued way below what I paid for them by the only agents who will sell them. If you can’t sell these on the open market then you can’t trust anything you are told.
The rental may look good but the service charge will be high, these are retirement flats so expect to be on the hook for professional and maintenance fees that will whittle away that income. If you are really lucky then the property manager will be different from the building owner so you get screwed twice.
A lot of alt property are attractive to larger pension fund but I feel they are mis sold for individuals.
Can I ask why you bought the student pods? The service charges are extortionate!
My mum died in 2013 and I got £100k from her jobs life insurance that was unexpected, I did not need it directly so I wanted to invest it and student pods were extremely popular at the time, I had maxed out my S&S SA. I was advised against it but I persevered. The fixed yield element was attractive but I now know that I paid for that in an inflated valuation. Now I try and pass on the warnings.
It was not all bad for me, it led me to creating a BTL SPV LTD and a few years later I passed on the previous homes that I'd paid off and had been renting.
All's well that ends well...I still don't see why anyone would buy those pods though, there are so many other better options!
in 2013 they looked attractive, had a lot of of popular press and were very popular.
In 2025 they do not look attractive, no press about this but people like me do try and warn people who listen.
Read the lease