Should we B2L?

Jonesya

JollyNolly wrote:

I haven't really thought about this that carefully, but I guess I would expect to be collecting the rent, as I don't live all that far away. Presumably it's normal for council tax and water to be covered by the rent, and gas and electricity to be paid for by the tenants as they go??

Council tax would be paid by the tenants and if they were all students then they'd be exempt. Most landlords paid the water rates out of the rent.

To actually tell whether it's worthwhile you need an idea of what market rents are and to calculate what you'd be paying and what you're likely to earn, realistically given maintenance costs, water rates, VOIDS - eg. your child fails to fill all the rooms. Circa 2004 they were ~£45-£50ish /student/week for terraces close to the uni.

Student letting is pretty cut-throat; if there's an empty downstairs room then stick a bed in it, if there's a large bedroom then whack a partition wall down the middle to split it into two and cram two students in it. Big loft - convert it. Mind you that was before the new HMO regs. so don't know what impact they've had.

JollyNolly

Jonesya wrote:

.. Mind you that was before the new HMO regs. so don't know what impact they've had.

Can you direct me to these regs??

bobsa1

As someone who does BTL and has HMO's I wouldn't do this if finances are tight. They can give a reasonable return but can bleed money. I wouldn't touch student lets (used to be a student accom manager) although rental can be higher costs for damage can be a lot higher.

Jonesya

There's some info on:

http://www.communities.gov.uk/index.asp?id=1151996

dunstonh

So we're toying with the idea of getting into buy-to-let. The idea is that we would buy a terraced house near the uni which son could live in with his friends for the next year or two, thereby hopefully breaking even rather than losing the rent every year. We can probably get about £25K together for a deposit buy surrendering an endowment that we have. We're both in our early fifties.

A mortgaged buy to let is a high risk transaction. If you are already finding things tight, then going into a mortgage buy to let could be financial suicide. Yes, there is the potential for gains but the consequences if it goes wrong could mean you end up losing the buy to let and your own home.

JollyNolly

dunstonh wrote:

A mortgaged buy to let is a high risk transaction. If you are already finding things tight, then going into a mortgage buy to let could be financial suicide. Yes, there is the potential for gains but the consequences if it goes wrong could mean you end up losing the buy to let and your own home.

Thanks dunstonh - I think I'm beginning to get the general message... :eek:

prudryden

Agree with above posts. If finances are tight now, I wouldn't be speculating in btl. There are a lot of costs and regulations to follow. Read through other forums on the lettings site.

JollyNolly

prudryden wrote:

... forums on the lettings site.

Okay, thanks - where are they?

prudryden

Hi Jolly,
Here's one going on now: http://forums.moneysavingexpert.com/showthread.html?t=333759

Go to your User CP, scroll down to Forum Jump and choose House buying, renting, selling, house prices

in_my_wellies

As has been said it is a lot of pressure to put on your son. Do you live near a uni? I do and so I considered buying a house near my local uni which I could let out. This was to cover the rent for my all my DD's and DS's as they went to uni. As they will all go to different uni's this seemed more practical and fairer and when they all finish the house can be kept or sold.
However it didn't work out as my DH refused to go along with my plans. This was just before the last house price rises and he regrets it now. Would I do it if starting this year? Possibly not due to interest rate rises and peak in the market it might not break even.