Student apartments commercially operated for the individual investor

Document Sample
Student apartments commercially operated for the individual investor Powered By Docstoc
					Student apartments
commercially operated
for the individual investor
                                   1	     Investments	made	easy. Student	
                                   accommodation	no	longer	means	damp	terraced	
                                   houses	or	institutional	halls	of	residence.	There’s		
                                   a	growing	trend	for	today’s	students	to	seek	out		
                                   new,	purpose-built,	contemporary	apartments		
                                   that	are	equally	convenient	for	campus	and	library,	
                                   shops	and	bars.	Bournston	Student	Homes	has	
                                   created	an	exciting	buy-to-let	product	which	meets		
                                   students’	needs	and	provides	investors	with	a	solid,	
                                   predictable,	high-yielding	and	hands-free	return.

                                                                                                                                      to cover all service costs – rental receipts
                                                                                                                                      being paid in advance keeps the investment
                                                                                                                                      cash positive.
                                                                                                                                          All apartments and studios are sold
                                                                                                                                      with a 150 to 999-year lease dependent
	    Sections                                                                                                                         on the individual building, plus a ten-year
                                                                                                                                      new-build guarantee. Investors are free to
1	   Investments	made	easy	   		                                                                                                      sell their apartment on the open market.
2	   Purpose	built	 	    	    	
3	   Fully	managed	                                                                                                                   Living	it	up:	Mezzino
4	   Finance	                                                                                                                         The	success	of	Bournston’s	product	
                                                                                                                                      (with	over	100	apartments	already	
5	   Overview                                                                                                                         sold	to	individual	investors)	has		
6	   Next	steps	                                                                                                                      led	Bournston	to	create	Mezzino		
                                    Management Suite and Reception
                                                                                                                                      –	our	student-facing	letting	brand.		
                                                                                                                                      A	huge	success,	Mezzino	is	becoming	
                                   The country’s university population has        investors via the service charge –
                                                                                                                                      synonymous	with	high-quality,	
                                   grown enormously over the last 10 years,       reducing individual exposure to voids               convenient	and	affordable	
                                   but despite this fact, the buy-to-let market   and bad debts.                                      accommodation.	As	the	brand		
                                   has largely ignored the opportunity to             All apartments are purpose built to a           gains	strength	it	will	be	rolled	out	in	
                                   provide fully managed, high-quality,           high specification and range in size from           various	university	towns	and	cities.	
                                   bespoke student accommodation.                 studios for individuals or couples through to          Mezzino	and	Bournston	Student	
                                      Bournston has developed a buy-to-let        six-bedroom cluster apartments. Investors           Homes	are	owned	by	The	Bournston	
                                   investment product to fill this gap and        can purchase any number of apartments.              Group	–	a	property	development	
                                   provide discerning individual investors            Buildings are fully managed by dedicated        specialist	with	investment	
                                   with a secure income stream and high           on-site independent management teams                opportunities	across	commercial,	

                                                                                                                                                                                     Bournston	student	apartments
                                   annual growth. Bournston’s City-centre         who take responsibility for all day-to-day
                                                                                                                                      residential	and	student	sectors.		
                                   student apartments provide a hassle-free       activities on behalf of investors including
                                   return of between approximately 6% and         setting rental levels, lettings, rent collection,
                                                                                                                                      By	offering	investment	opportunities	
                                   8% gross, depending on the type of             building repairs and furniture renewal. Rent        across	all	three	sectors,	Bournston	
                                   apartment purchased and its location.          is paid gross to each investor three times          gives	investors	the	flexibility	they	
                                   The product provides for an income safety      per year, in line with each academic term.          need	to	stay	one	step	ahead.	
                                   net in the event of non-letting, as rental     Service charges are around 25% of gross                See	for		
                                   voids or bad debts are shared across           income and are payable half yearly                  more	details.

2	    Purpose	built.	Stylish	city-living	apartments	with	all	   Apartments                                   Dining	area                      Fully-fitted	kitchens
mod	cons,	en-suite	shower	rooms	and	clean,	modern	décor	         1, 2, 3, 4, 5 or 6 en-suite bedrooms          American-style breakfast bar      Electric cooker with double oven

make	for	a	smart	investment.	Each	Mezzino	development	
                                                                 (depending on location)                       Bar stools                        and extractor fan
                                                                 All carpets and curtains                                                        Fridge freezer

has	been	designed	to	meet	the	needs	of	aspirational	             Fully-fitted kitchen
                                                                 Furnished dining and living area            Studios

students,	boasting	impressive	communal	facilities,	often	        Electric heating                              Fully fitted kitchen
                                                                                                               Breakfast bar
including	coffee	bars,	an	on-site	solarium,	launderette	                                                                                      Communal	services		
                                                                 Furnished study bedroom including
                                                                 bed, desk, pinboard, bin, chair,              En-suite shower room
                                                                 wardrobe, shelf unit, set of drawers,                                        and	facilities		
and	secure	bike	storage.	The	specification	of	Bournston’s	
                                                                                                               Study area
                                                                 curtains, wall and desk lights
                                                                                                               Bedroom area with double bed
                                                                                                                                              (subject	to	scheme)

studios	and	apartments	is	listed	to	the	right:
                                                                 En-suite shower rooms with shower
                                                                                                               Leather sofa or chair             Mezzino lounge/coffee bar with
                                                                 cubicle, washbasin, toilet and towel rail
                                                                                                                                                 Sky TV, pool tables, slot and
                                                                 All rooms are ready-wired for                                                   vending machines
                                                                 telephones and broadband
                                                                 internet access                             Living	area                         Dedicated accommodation team
                                                                                                                                                 24/7 on-site security and CCTV
                                                                 Secure door-entry system                      Leather sofas
                                                                                                                                                 24/7 on-site launderette
                                                                 Smoke and fire detectors                      Coffee table
                                                                                                                                                 On-site solarium
                                                                                                                                                 Secure bike storage

                                                                                                                                              Depending on the scheme and the advice
                                                                                                                                              of Bournston’s independent management
                                                                                                                                              team, the Mezzino branding includes the
                                                                                                                                              installation and operation of LCD TV’s
                                                                                                                                              within each studio or apartment. This
                                                                                                                                              includes a TV licence, as well as Freeview
                                                                                                                                              and Sky Sports channels. There’s also free
                                                                                                                                              internet access and contents insurance.
                                                                                                                                              These services are installed and operated
                                                                                                                                              within the service charge budgeted at
                                                                                                                                              around 25% of gross income.
                                                                Apartment Living Area

                                                                Apartment Kitchen                             Apartment En suite Bedroom

                                                                                                                                                                                           Bournston	student	apartments
                                                         The management of each development
                                                         is contracted to a third-party organisation
                                                         with a national reputation and proven
                                                         track record. Each apartment is marketed
                                                         for pre-letting and re-letting through the
                                                         Mezzino brand. All student occupiers sign
                                                         assured shorthold tenancies typically for
                                                         48 or 50 weeks. Every student also pays
                                                         a damage deposit, which is held by the
                                                         management company in accordance
                                                         with current legislation requirements.
                                                             Rents are set by the management
                                                         company in line with open market
                                                         levels and include all bills and services
                                                         excluding telephone charges. Gross rents
                                                         are collected by direct debit or credit
                                                                                                           Studio Kitchen
                                                         card three times per year in the following
                                                         proportions: October 40%, January 40%
                                                         and April 20%. The collections coincide
                                                         with receipt of student loan grants and
                                                         are forwarded to apartment investors
                                                         immediately on receipt.

                                                         Service	charge
                                                         An annual service charge, representing
                                                         approximately 25% of gross income, is
                                                         payable by apartment owners. Service
                                                         charge payments are collected from each
                                                         investor every six months to cover:
                                                                                                           Studio Living Area                                  Common Room
                                                            Water charges
                                                            Site security                                 Budgeted service charges are available              Building	an		
                                                                                                          for each development and are reviewed
                                                            Building and estate management
                                                                                                          annually.                                           exceptional	brand
                                                            Sinking fund                                      Each apartment is sold with a new
                                                                                                                                                              Such	a	unique	offering	requires	
                                                            Repairs and maintenance                       buildings guarantee from Premier, Zurich,
                                                                                                          NHBC or equivalent.                                 recognition,	and	we’ve	invested	
                                                            Communal renewals                                 On completion of the last apartment             heavily	in	creating	the	student-friendly	
                                                            Staffing and agents’ fees                     sale in each development, the freehold or           Mezzino	brand	to	achieve	maximum	
                                                                                                          ground lease of the building is passed from         standout	in	the	marketplace.
3	     Fully	managed.	With	Bournston,	it’s	all	taken	       Apartment renewals: furniture, fixtures,
                                                            fittings, carpets, curtains
                                                                                                          Bournston to the management company
                                                                                                          and each apartment leaseholder becomes
                                                                                                                                                                 We	believe	we	have	something	
                                                                                                                                                              special	to	offer	students,	parents,	
care	of.	Our	on-site	management	teams	handle	               Lettings management: marketing, liaison
                                                            with university, room allocation, rent
                                                                                                          a shareholder in the management
                                                                                                          company. The current management regime
                                                                                                                                                              investors	and	universities.	
                                                                                                                                                              We	introduced	the	distinctive	
everything	from	routine	maintenance	to	finding	             collection, debt recovery, investor liaison   has been created to extract maximum
                                                                                                          benefit in terms of income stream and
                                                                                                                                                              Mezzino	brand	to	give	our	student	
                                                                                                                                                              accommodation	the	profile	it	
tenants.	So	all	you	need	to	do	is	sit	back,	relax	and	
                                                            Void/bad debts provision                      hassle-free management. Where more
                                                                                                                                                              deserves,	enabling	students	across	
                                                                                                          than 75% of investors are in favour, the
                                                                                                                                                              the	UK	to	instantly	recognise	our	
watch	your	investment	flourish.	
                                                                                                          management regime can be altered to
                                                                                                          allow a change from student use, subject            developments	and	know	the	quality	
                                                                                                                                                              of	the	accommodation	we	provide.

                                                                                                                                                                                                          Bournston	student	apartments
                                                                                                          to obtaining any necessary permissions.
                                                                                                          This provision allows flexibility in the unlikely      Developments	in	Lincoln	and	
                                                                                                          event of there being insufficient demand            Loughborough	have	already	been	
                                                                                                          from students in the future.                        branded	Mezzino	and	the	brand	will	
                                                                                                                                                              be	rolled	out	nationwide.	
                                                                                                                                                                 	To	see	the	brand	from	a	student’s	
                                                                                                                                                              point	of	view,	take	a	look	at		

4	     Finance.	While	you’ll	    Mortgages                                           Inheritance	Tax                              Losses incurred on the rental business
                                                                                                                                  can be offset against other rental taxable
                                                                                                                                                                                   Stamp	Duty

almost	certainly	want	to	seek	
                                 Mortgage facilities are available, subject to       Apartments will form part of an              income or gains for the current tax year.        Apartments with a value of less than
                                 status and valuation, for each apartment.           investor’s taxable estate.                   Unrelieved losses are carried forward to         £120,000 are exempt from stamp duty,

independent	advice	before	
                                 Bournston has an arrangement with SPF                                                            set against future profits.                      while a stamp duty of 1% is currently
                                 Sherwins, part of Savills Private Finance           Income	Tax                                      The capital cost of acquiring an              payable on acquisition of all apartments
                                 and one of the UK’s largest independent                                                                                                           between the values £120,000 and
committing	to	an	investment,	
                                                                                                                                  apartment (including any legal and
                                 mortgage brokers, who can provide a                 For income tax purposes, the Inland                                                           £249,999. This rises to 3% if the value is
                                                                                                                                  professional fees in respect of the
                                 recommendation and written quotation.               Revenue will view investors as running a                                                      between £250,000 and £499,999, or 4%
                                                                                                                                  acquisition) or any furnishings or fixtures
we’ve	put	together	the	          SPF Sherwins (the specialist arm of
                                                                                     rental business. Broadly speaking, taxable
                                                                                     income will be calculated by subtracting
                                                                                                                                  are not classed as allowable expenses.           for apartments worth over £500,000.

information	on	these	pages		
                                                                                     allowable expenses from the amount
                                 Savills Private Finance): Contact
                                 Richard Stone on 0845 450 5747                      of gross rent received.                      Capital	Gains	Tax

to	point	you	in	the	right		
                                 or by email at                     Allowable expenses include:                  The chargeable gains on the sale of the
                                                                                                                                  apartment will qualify for taper relief at the

direction	and	provide	a	brief	
                                                                                        Management fees                           non-business asset rate. Part of the gain
                                                                                        Service charges                           will be exempt from Capital Gains Tax
overview	of	the	tax	issues		
                                                                                                                                  after three years’ ownership.
                                                                                        Legal and professional fees                   After 10 years’ ownership, 40% of the
                                 We recommend that all investors contact                relating to ongoing letting               gain may be exempt. This means that for
that	may	be	involved.            an appropriately qualified accountant or tax
                                 adviser to discuss their individual tax position.
                                                                                        e.g. lease renewal, eviction costs
                                                                                        Repair and maintenance costs
                                                                                                                                  a 40% taxpayer, the tax on a gain sale will
                                                                                                                                  be reduced to 24% and for a basic rate
                                     The following is an overview of some of                                                      taxpayer this will drop to around 13%.
                                 the main tax issues associated with investing          Interest incurred on any loans taken
                                 in this asset class. This information was              out to purchase the apartment
                                 correct at the time of going to print but
                                 should only be used as a general guide.                Annual wear and tear on the cost of
                                                                                        providing furniture and furnishings

                                                                                                                                                                                                                                Bournston	student	apartments
5	     Overview.	Bournston’s	             A low-risk, hands-free
                                          income stream

intelligent,	innovative	approach	         Robust gross returns of
                                          around 8% in year one and
brings	you	a	city-centre	investment	      increasing thereafter

with	a	secure,	risk-reduced	income	
                                          Investment sizes to suit most
                                           budgets (subject to availability)

stream	in	place	from	day	one.	            A high-quality product developed
                                          to meet a clear, specific and
                                          growing market opportunity
                                          All renewals, maintenance and
                                          rental voids shared by the
                                          service charge
                                          Minimal individual exposure to risk
                                          Investment supported by
                                           Mezzino branding
                                          City-centre properties with high
                                          capital growth potential
                                          Investors hold shares in the
                                           management company
                                          High retention rates on occupancy
                                          through rebookings

                                       The information contained in this brochure is
                                       for guidance only. Bournston Student Homes

 ‘I	looked	into	the	private	sector,	
                                       operates a policy of continuous product
                                       development and features may, therefore, vary
  but	although	it	seemed	cheaper,	     from time to time. These particulars should
                                       not be relied upon as accurately describing
  bills	weren’t	included.	And	as	      any of the specific matters described by any
  far	as	location	was	concerned,	      order under the property Misdescriptions Act
                                       1991. This information does not constitute
  nothing	came	close.’		               a contract, part of a contract, or warranty.
                                       All details correct as above at time of going
 Mark	Smith,	student                   to press. The right is reserved to alter the
                                       specification without prior notice.

 ‘There’s	always	something	going	      Terms and conditions.
                                       YOUR HOME MAY BE REPOSSESSED
  on	–	parties,	events,	sports	        IF YOU DO NOT KEEP UP REPAYMENTS
  tournaments…	I	liked	it	so	much		    ON YOUR MORTGAGE. SPF Sherwins is a
                                       trading style of Savills Private Finance Limited
  I	re-booked	for	my	second	year.’	    which is authorised and regulated by the
                                       Financial Services Authority (FSA). Savills
 Sarah	Jones,	student                  Private Finance Limited is a subsidiary of Savills
                                       plc. Savills Private Finance Limited, 25 Finsbury
                                       Circus, London EC2M 7EE.
Next steps
If you’d like to find out more about investment
opportunities with Bournston, please call Senga
Hill on 0115 952 1021 or log on to our websites – and
    Open days are held monthly – usually on
Saturdays – and are organised by individual
appointment between 10am and 3pm. If you’d
like to attend our next Investors’ Open Day
please contact Senga Hill or Jane Slany on the
above number.
    To reserve an apartment, please call Senga or
Jane to confirm your choice of unit(s). We’ll then
hold it for you until you’ve completed the enclosed
reservation form and returned it to us at the
address below with supporting identification.
    For mortgage advice and information please call
Richard Stone at SPF Sherwins on 0845 450 5747
or email

Bournston Group
Huntingdon House
278 - 290 Huntingdon Street