The prospects of living abroad are both scary and exciting at the same time. Students, and their parents often look forward to a positive experience when university terms begin.
As expected, living expenses and quality of housing are key in defining student life in the UK. Faced with rental issues or possibilities of less than desired accommodation quality, parents may opt to invest in property instead to help their children adjust to life in a new place.
We spoke about this to Jazmine Goh and Shelvin Tan, founders of Red Bean Consultancy. As experienced property advisors, they offered their advice to purchasing properties in the UK – applicable to both first-time buyers or experienced investors. Here are a few pointers to get you started.
First priority for any parent keen on buying abroad in the UK is to treat the purchase as an investment.
This is aligned with a typical investment cycle.
“Even if the children may be staying there for a few years, parents may forget that the children graduate.
“At the end of the day, it (the purchase) is a temporary and only for a fixed period of time,” Goh explains.
She says that parents will need to think about what they want to do with the place after their children graduate.
Aside from looking for secure and convenient locations to universities, transport links and amenities, parents should think about leasing opportunities and resale strategies. What’s important is to have a clear exit strategy once the student completes his or her course.
This differs if the family has long-term business dealings at the location, or if their extended family can live in that accommodation while attending the universities’ nearby. Some families may want to use it as a holiday destination as well.
But, what’s important is to not be overly emotional about it, Goh says.
Both advisors note that buying a property is a major decision, having to consider investment, and commitment to a chosen location.
But, keep the transaction professional as practicality is crucial to investing in the UK. “(The investment is) not something that is permanent, but think about the long-term arrangement of such a purchase,” Tan adds.
Both agree that the liquidation process has to be easy post-study, and this can be supported with the help of advisors such as Tan and Goh. Children may have plans of their own when they graduate and may not want to remain in that location.
Like starting a new project, always do your research. Red Bean Consultancy insists that parents have to be open-minded about what is offered in the UK market.
And that means, at times, not just listening to friends.
Tan explains that while friends have the best intentions for the investment, due to their own personal experiences, she emphasises that working with a property education advisor is valuable.
“We listen to the news and we work with all types of developers, so we know how to tailor their (parents) investment experience and journey,” she says.
Hearsay or perception of a property in a so-called “slum”, tends to put parents off, but there may be a plus side to investing in an older area.
Parents need to understand that some areas are undergoing regeneration.
Tan says regeneration is a process of change and improvement, and it takes time for results to show.
All they ask is for parents to keep their minds open.
And, aside from taking their friends’ advice, be prepared to listen to experts who spend time putting together information on the do’s and don’t of investing abroad.
Goh adds that what friends’ experience 30 years ago during their university days, is different from what is offered in today’s market.
“You have to look at the prospect and future outlook of the market, because nothing is permanent in this world,” says Tan.
At the end of the day, Red Bean Consultancy ensures that their work with clients is transparent and importantly, customised to suit the purchasers’ needs.
Location, leasing opportunities and taxes, and other surcharges for foreign buyers are information that advisors like Tan and Goh compile for the potential buyer.
As a starter, taxes that parents should account for are:
Parents who are after a sound investment and a safe accommodation for their children, are encouraged to think about investment purpose and the long-term prospects of the property.
Being open and flexible about decisions are traits towards a successful investment, and well-informed investment must derive from whether a mortgage is needed or if the parents are able to make cash purchases.
Having a frank discussion about motivations and needs with your property education advisor before deciding where to park your money.
Red Bean consultancy specialises in customising investment decisions. “And we are here from the start to the end to hold your hand, ” Goh adds.
The consultancy covers all zones in London, with their current ones focused on the Silk District in Whitechapel and Cambridge with schools and universities nearby.