Buying a House to Live in at University

Kavanne

I know some parents buy houses for their kids to live in whilst they're at university, and I was thinking of doing the same (except I am the student, buying for myself).

My mum is worried about me tying up my money and not getting an income from it, but I think the growth potential is worth it. I'd probably own it for a least 3 years (the duration of the rest of my course) and maybe longer if I don't move away from Southampton.

Are there any parents here who've bought for students? If so, what was your experience?

Over 3 years, can I expect a good return or is the property market stagnating at the moment?

My financial advisor says that if I invested the money instead, and don't take an income, I might be able to double my money in 10 years. Is this realistic?

Thanks for all your help!

jennifernil

We have done this. Our daughter is at Uni in Glasgow, the flat and the mortgage are in her name and we are guarantors. She is on a 5 year Masters degree so will have the flat for 4 1/2 years. She uses the 2 small bedrooms as bedroom and study and rents out the larger bedroom. She also has a large living room, kitchen. bathroom and extra toilet. It is only 6 minutes walk from Uni. She rents the room for £290 pcm this year. This only pays half the mortgage.
There are a lot of costs associated with furnishing, stamp duty, legal fees etc, I doubt she/we will make any money on the deal, but at least her digs will not have cost anything and they are convenient and of a good standard.

CB1979_2

i did this for myself 5 years ago up at Staffs Uni, got the place just at the right time!

got it for £22k sold it 3 years later for £81k, so made a nice healthy profit and didn't have to pay £80 per week for a pokey room (I had no mortgage, paid cash for the property)

it's all well and good saying invest it here and there, but don't forget you'll have to pay a mortgage (if you let a room out, you can subsidise your mortgage by them paying), but if you do invest elsewhere you'll have to pay rent somewhere else.

ah decisions decisions! lol

on a more social side of things though, I regret not going into halls of residence for my first year, as it seems I missed out on the real fun and also took a while to break into the groups that had already formed.

Kavanne

I am already in halls this year, so got that experience under my belt already!

I wouldn't have a mortgage, I'd pay cash. But I don't think I can afford anything big enough to rent out, so I wouldn't really be getting an income, the only profit I could make is from selling it in 3 yrs time...

Alan_M_2

What an eye opener this thread is, I had a pre conceived idea that students were mostly pennyless and scraping to get by most of the time, but here we have a thread about buying property whilst at Uni and not with a mortgage but buying cash!

Where do you get that kind of money whan you're a student?

I'm not knocking it at all, just not a conversation I found surprising.

Kavanne

Alan_M wrote:

Where do you get that kind of money whan you're a student?

Sorry, should have explained. My father died a few years ago, and my parents were divorced, so inheritance came straight to me.

linlin_3

I researched buying a student let house in Southampton and found the market fairly well swamped. You'd need to know the area well - Southampton has no-go areas. Listen in to some of the student message boards for more info on this, and find out what rents they expect to pay.
If you were prepared to buy a house that hasn't yet been let and do some work on it, it may be viable, but three years isn't very long to own a house. You also need to find out more about letting - listen in to the landlord zone forum. All student letting is about bods in beds. Take out a sizeable bathroom, make a small shower room and put in another bedroom. It's a cut-throat business and you wouldn't need to be doing your fellow renters any favours.
I've just read your note about not buying anything big enough to rent out......surely two bedrooms at least? Life could become a bit insular without at least one flatmate. Consider also what you may miss by not renting with other students........... my son is a 2nd yr student, now renting with 3 others and enjoying it.
I suspect the investment value of property falls in proportion to it's capacity to provide accommodation, so a one bed flat will have poorer investment value than a two or three bed.

Acc72

CB1979 wrote:

i did this for myself 5 years ago up at Staffs Uni, got the place just at the right time!
.

This is the key - timing.

I was surprised to learn a couple of people did this (ok their parents) when I was at Uni in Manchester 10 years and they made a fortune - but I think you would really struggle to make any profit at the moment (after paying legal fees, surveys, stamp duty etc.etc.)

If you have lodgers, how would you feel if they damage your property ? - if you were renting you wouldn't really mind !!

Also, don't forget about maintenance costs that you would have to cover.

Mrs_pbradley936

I know a great deal about this topic and this university housing situation because my son was planning to go to Nottingham and we researched buying a house there which was feasible. He ended up going to Southampton and that was not feasible due to the difference in house prices

Two and three years ago the average rent for students in Southampton was £250 a month for a room in a house within walking distance to the main campus. So to make it viable you would need to have a house that would allow you to rent three rooms and live in one yourself so you are looking at a 4 bed house. I just looked on rightmove.com and you would need to spend about £300K. The repayments on that amount are £1,932. per month. I have no idea how much you could put down but I just did that on the assumption that you would be borrowing all of it.

zag2me

Half the fun of uni was living in halls and shared houses meeting all the great people.

Kavanne

I wouldn't be able to afford a property with more than 2 bedrooms, unfortunately, I was just wondering, mainly I was asking about how well the property market is performing at the moment, as in, whether I could expect a decent return if I were to sell in 3 years?