how to help my cash-poor,homeless daughter!

freeleaf

Advice please!! My daughter is doing a master's, working for free as an intern for 2 days, writing a dissertation, working 3 days in an office and every weekend, most evenings, to pay rent, bills food etc. I want to help, and have been a scource of cash flow when she (Frequently) runs out. She's leaving one city and moving to another internship and is looking for for another cheap rented property. I'm thinking of getting a small buy to let for her to live in, she'd have to share with another student but the rent would be more manageable and she wouldnt need to worry if she coudnt meet it occasionally.
I've just started looking into it-already found a problem. I only have about 20% deposit-looking for a place about £180000 and have £3600. Also, as she's related to me, is it legal to have it as a buy to let?. I did think about her taking the mortgage in her own name, better LTV, but as she earns very little and is in temporary short term jobs, I'm not sure she'd be given a mortgage, even with me as a guarantor? Any suggestions would be gratefully received.

HappyMJ

Getting into the buy to let business is a bad idea. Especially when renting to family who can't afford the rent. Tell her to be the lodger in someone elses house.

bobthedambuilder

Are your figures right? £3600 is 2% of £180K, not 20%.

freeleaf

Sorry, I meant 36000, 20%.
Is it really such a bad idea to help family-she's been paying other people's mortgage for the last few years, I thought this way at least there's be something for herself at the end of it, even if I only resell in years to come and give her the deposit/

bobthedambuilder

You should do what you feel is right, and if you want to help your dd, then this is a perfectly legitimate way. Many people do exactly this in such a situation, eg buying a property for a student child to live in while at uni, and they in turn can get others in to help with the rent. You can sell up as soon as your dd gets on her feet (or carry on renting to others if it proves lucrative). Your dd sounds very responsible and hard-working, and there's no reason to suppose that she will change if she's paying rent to you (is there?)

Just remember that it's your money and debt that's going into this (whether you have a formal or informal letting arrangement, if that ends, you've still got the mortgage to pay).

You didn't say whether you had a property of your own, and whether that has a mortgage. If yes to both, the lender on the second property will need to know, and you will have to prove that you can keep up both payments.

You should also be careful if that £36K is your only emergency safety net.

DannyboyMidlands

She should stop messing around with internships - particularly if they involve moving city - and concentrate on paid work instead.

CLAPTON

how long is she likely to be in this city
how long is the masters degree
where will she wok when she qualitfies ?

seems very expensive and inflexible if it's only for a short time

ACG

£180k property for 2 students sounds expensive! I suppose it might be the norm if your down south but being in manchester your looking closer to £130k.

If thats what you want to do then its not impossible, presming the rent is 125% of the mortgage repayments you should be fine. If you know what your doing get speaking to some lenders and explain your circumstances to them they will be able to tell you before you apply if it will pass. Otherwise get in toch with a mortgage advisor they will do the work for you but you will probably have to pay a fee for the service.

herbiesjp

You could also look at a dependents mortgage.

This is basically a normal residential mortgage taken out in your name, but that allows a dependent to live there. This assumes your income is enough to support any mortgage you have and any other debts.

Otherwise a BTL mortgage to relations is possible, through a limited number of lenders.

Mrs_Z

I appreciate that you wish to help your daughter, but I think you are rushing into things without thinking.

Firstly, your daughter is moving to another city for an internship - this sounds it could be a potentially temporary arrangement. If she moves on yet again after 6 months to a paid job in another city, what then? You will be left with a BTL property and landlord's responsibilities. Yes, you could sell the flat, in theory at least - but lots of people are having problems selling at the moment. And BTL loans are expensive - have you looked into the arrangement fees?

If she was my daughter, i'd advise her to get a flat share in the new town (cheaper than renting by herself) and/or agree to give her a small monthly allowance. In the meantime, hold on to your deposit money and when you daughter has finished her studies and found a paid job and is in a position to settle down and earning, then gift her the money for a deposit for her to buy her own place. (no idea if there are tax issues here).