Buying a flat when my daughter goes to Uni

Jac123_3

My daughter will be going to Uni 2012 and I'm considering buying a flat/house for her to stay in.

I may need to take out a small mortgage, therefore, I would need to let out a room to another student/s to cover the cost.

I have no experience in being a landlord.

Any advice appreciated.

violettasomerset

I can't comment about being a landlord, but I would wonder whether it is worth it for just 2 years of her living there - in the first year, she'd be much better off in halls of residence, in order to make friends and get the full first year experience. In second and third years, she may prefer to live with a large group of friends though of course that will depend on how social she is. After that, she may well leave the town to get a job and you'll have to either sell up or rent to other students, and I rather imagine that could be more hassle than it's worth!

What does your daughter want to do?

mustrum_ridcully

The most important question here is what does your daughter want.

Don't just assume that her mates will want to move into a shared house when her daddy is landlord. This could leave your daughter feeling very isolated and not part of the student scene.

I know one girl who did this when I was at uni (this was when this sort of thing was unheard of). Her best mate instead of moving in as she expected ended-up living in a shared student house in the heart of the student area. She lived about a mile away on the outskirts of the student area, with a nightmare neighbour, she couldn't wait to graduate and move out.

thegirlintheattic

Things can get very difficult for both you and your daughter if problems with the tenants arise, I think you need to seriously consider this, especially as you have no experience as a landlord. These issues can be even worse if your daughter ends up being friends with the other tenants.

Talk to your daughter about what she wants from uni accommodation as well. It will be much better socially for her to live in halls for at least the first year, and after that she may well want to live with a large group.

Might also be difficult to buy a house in the short time between August (when results are confirmed) and October when your daughter will start uni.

Acc72

I agree with the other comments.

If your daughter lived alone she would miss out on a big part of the student experience.

Also, if you rented a room(s) then your daughter would effectively be the on-site landlady and the dynamics would be very different than if she was just doing a regular house share.

On the other hand, I did see this happen 15 years ago and the parents/child made a mega profit as the house prices increased so much in a couple of years, but I cannot see this market again for the foreseeable future.

Also after she graduates your daughter may decide to re-locate, leaving you with a house to sell (with the associated costs and risks etc.).

daisiegg

I know lots of people have been talking about the potential negative aspects of being your daughter's landlord, but just to offer another perspective, I was at uni a few years ago and the people who had a friend whose parent had bought a house were considered the lucky ones. I knew quite a few people who lived in houses where someone's parent was the landlord, and everyone envied them. They didn't have to deal with any of the rubbish that everyone else did!

hazyjo

What if she dropped out of her course? Or changed Uni or even quit it altogether?

Jx

Radiantsoul

I would say don't do it to be honest, at least not in the first year where you want to be living with a large group.

I suppose you could do it in the second year, but I would be inclined to do it as an arms length thing so whoever your daughter shares with doesn't know.

The only person I knew who did this dropped out after a few months.

jennifernil

I think the costs were you just to have it for 3 years would be high, but worth it for a longer period.

We bought a flat for our daughter, but she was on a 5 year course, and then she went on to do a PhD, so will soon have been there 8 years now.

Hers is only a small flat suitable for 2, 3 at a stretch. She had a housemate for 4 years, but since then has lived alone. Since her flat is 5 minutes walk from Uni, getting a housemate was no problem.

We bought in her name, so the housemate was a lodger rather than a tenant. We started with a guarantor mortgage, but paid it off as soon as possible, so she has now had a good chunk of any future inheritance!

Despite its good position, the flat has not increased in value much. In fact, if you count all the costs....legal, mortgage, repairs etc....it has cost a good bit, but then she has not had to pay any rent, and has had a nice place to live.

00ec25

just to echo earlier sentiments, be clear on your objective for this:

- if the intention is for DD to avoid having to pay rent then you will be taking a huge gamble in buying somewhere that could cost you a lot more in lost value, running costs and mortgage payments than if you simply gave her £x per month to pay her rent. If the plan is to get a tenant/lodger to subside some of your costs then as previously said this ties you and DD into a relationship than could be problematic: housemate issues or DD simply wanting to be with her mates in a larger houseshare. The (5 bed) house I lived in was owned by a parent and been let out for 6 years after their kid went down, it was managed by the uni (see below) but it was restricted to UG from my college only at a cheaper rate, for philanthropic reasons

- in current market conditions you will almost certainly be unable to sell it in 2 - 3 years time for a profit given such a short period. So are you willing to become (student) LL's after DD graduates if the objective is you/DD have an investment nest egg as you will need >3 years to realise any return.

- Does the uni operate a headed tenancy scheme whereby you could use them as your LA (contrary to private sector LA, most uini run HT schemes are staffed by people who do understand L&T law) but obviously your profit is not as great as doing it privately.

princeofpounds

All good advice. She will/should want to be in halls in the first year assuming it is a normal university.

The transactional costs involved in buying and selling would probably mount up to mean it's almost certainly not a good idea for a 2-3yr occupation. You are also exposing yourself to any losses from falling house prices.

Your daughter being your proxy as a landlord is not ideal but manageable as long as she tends to pick responsible friends. On the plus side, it does secure (hopefully) decent quality accomodation and remove the risk of being subject to a nasty LL, both of which are serious worries for students.

So financially it's an idea that sucks, in a modest way. Otherwise it's just down to personal preferences.