Buying a House to Live in at University

Mrs_pbradley936

Kavanne wrote:

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?

Nobody can answer that without being Mystic Meg!

Seriously what I would do is buy a one or two bed flat and rent it out. It should bring you about £550 – £600 a month. Then when you have graduated you can move into so that it becomes your primary residence and then you will not have to pay Capital Gains Tax (depending on how long you stay there).

That is what we ended up doing but we bought near us (Essex) so that we could be on hand if need be. We bought a one bed flat for £98K and borrowed £80K. We paid the mortgage but son kept rent of £550 per month. Financial advisor told us to do that because son could have it all without tax (not working) and it we wanted to give him £550 a month it would cost as a lot more because our income is taxed at 40% before we give it to him. Place is now worth £125K plus our son has had £550 a month for three years of being at university which nobody paid tax on.

Before anyone jumps on me tax years run April to April and son had only one tax year in the three he was at university that counted because we bought the place in September.So year one September to April. Year two April to April but by the time you take out agents fees and other expenses still below tax threshold. Year three April to June.