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PBSA's - What are the PROs & CONs?


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Hi all,

I am currently prospecting on some 1 bed flats in PBSA. I have done all my costs and from that point of view it makes sense.. but it all seems too good to be true...

My main concern is exit strategy as with all the learning I have done I feel this property will likely not produce much of a capital gain (if at all); especially when compared to residential properties. Am I right to think that? 

I would really like to hear some of your opinions. Perhaps why you would invest in a property such as this, and why you wouldn't.

Any thoughts really appreciated. 

My intention would be to hold this for the long term, on a repayment mortgage (the income is not needed) with the intention of the mortgage being paid off as I enter retirement so that I can then use the rent as an income stream to see me through my later years. What do you think? 

 

Any thoughts will be greatly appreciated.

 

Max

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Don't do it, Max!

'Fractional ownership' models such as PBSA, hotel rooms, care home rooms, etc. are usually a poor investment in my opinion. The limited exits are definitely one significant element of that for sure. Also, cosnider title, rental maketability, service/operator charges, developer/operator track record, financing limitations, and so forth. There are so many other alternatives to consider that do not have such limitations but produce similar returns that it's just not really worth it.

That's my view at least, I hope it helps.

Best

Richard

Richard W J Brown a.k.a. The Property Voice

Property Investment Strategist

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