Buy to let for my (student) son

uzubairu

luckyfool wrote: »

You could remortgage your property to fund the deposit, or to be able to buy the new property for cash should you want.

My friend at work did this for her 24 year old daughter last year.
Her daughter was struggling to get a mortgage in her own right even though she had a steady, full time job and a 10% deposit.

My friend only had 6 years remaining on her mortgage and a lot of equity.
She remortgaged, extended the term and bought a 2nd property outright for cash.

Her daughter now pays the increase in the mortgage payments for as long as she stays in the property (2 bed terrace in Oldham).
While she is single and has no kids the property should be fine for the next 3-5 years.

When her daughter wants to move on, she'll decide whether to keep it or sell it.

If you went down this route, I think the extra borrowing would attract a new interest rate which would probably be higher.

Danstar_2

My dad looked at buying a house for my second year and renting it to me and my friends when considering he was paying £390 a month for the rent of our house.

3 bed semi, front living room becomes 4th bedroom at £1,560 - 390 for me £1,170 and the mortgage would have been about £600 he said so a nice tidy profit rent it out to some other students when I graduate, but in the real world it wouldn't be worth the hassle to sort out so he dropped the idea.

I'd recommend halls of residence anyway. Mine were £480 a month, free utilities and catered. The house we moved into just gets trashed by noisy, lazy people who don't clean up and I wish I was still in halls and these guys WERE my friends. Unis finished soon then off to America to uni.

PasturesNew

If there are three or more people living in it, then you'd need to look into HMO regulations. This is House of Multiple Occupancy and covers everything from expensive fire-proofing/alarms, through to how many loos/showers are needed and even how many metres of kitchen worktops (and even how many cookers/sinks in larger places).

HMO regulations are quite complex. The HMO regulations changed just recently and you now need planning permission, which would probably mean buying a house would restrict you to either buying him a 1-bed flat to live alone (with his pot noodles), buying a 2-bed flat and having nobody move in because the 2nd bedroom was too small for them, or buying an existing HMO. If buying an existing HMO then you have to query why the LL's selling it if it's such a money spinner.

http://www.mglewisandson.co.uk/hmo-houses-in-multiple-occupation/planning-april-2010

So you need either planning permission, or planning consent, for new Houses of Multiple Occupancy.

Pincher

Arbitrage pricing implies that overall renting and buying cost should be equivalent, because if it's obviously cheaper to buy, everybody will buy, pushing the price up until it reaches equilibrium with rental cost, and vice versa.

You should only buy a property because it's a good investment.

Saving £1,000 a year in rent by spending £?,000 on mortgage fee, solicitor's fee (no stamp duty now), and new washing machine/boiler/bed/sofa/desk etc. doesn't sound like the intelligence level demanded by university. I blame Tony Blair.