What would you do?

ShreddingDan

Hypothetical (at the moment)

If you were 19y/o making around £1,100 pm.

Your father is willing to gift you a £70k property. You don't want to live in this property as you are fine living with you parents.

Your aim is to use this to your advantage and to generate as much income as possible what would you do?


All opinions welcome, remember this is hypothetical at the moment.

Jamman960

I'd take the hint and move out (sorry couldn't resist) - seriously though I was happy living with my parents at 19 but once I moved out and became a little more independent I'd never move back unless I really had to.

back to business though - is the property in a livable condition? if so renting it out for a few years and then putting the money earned and the existing property towards a more expensive house could be a good option.

BitterAndTwisted

If the only aim is to generate as much income as possible then the solution is to let it rather than live in it.

A much less troublesome option would be to live in it and take in a lodger. You can charge up to about £4,200 per annum without having to declare it for income-tax-purposes. That should more than cover the Council Tax, utility-bills and any maintenance costs

ShreddingDan

Thanks for the replies. I knew someone would say take the hint!

Hypothetically though would there be anything to stop me from re-mortgaging the property and using the funds to put deposits down on one or two more properties in the area with the objective being to let them out as well as the original property?

Thanks again

marliepanda

It depends if the bank is willing to offer you a BTL which can be difficult without a residential mortgage already.

Plus you will need to leave in 25% so you're looking at 17.5 k in, so 52.5k to put as 25% on other properties.

You dont appear to have enough income to pay three mortgages/repair 3 properties etc. I wouldnt advise it.

More importantly, what does your Dad think?

BitterAndTwisted

Hypothetically it could be done but it's not a risk or trouble-free prospect.

How much do £70k properties rent for where this house is?

Yorkie1

One standard comment when parents wish to give their children substantial gifts, is that both sides need to be aware of the deprivation of assets rules.

If your father currently owns this house, and gives it away but then needs means-tested care or benefits in the future (no definition of any timescale), then he may well be deemed still to own it for the purposes of being able to pay for his care etc.

Now, given that you're only 19 so your dad may not be that old, and assuming that your dad can easily give away a £70K property without it impacting on the rest of his assets, then this is unlikely to be a problem for him. But I didn't want to presume without commenting.

Thrugelmir

ShreddingDan wrote: »

Hypothetically though would there be anything to stop me from re-mortgaging the property and using the funds to put deposits down on one or two more properties in the area with the objective being to let them out as well as the original property?

Thanks again

• You don't own a residential property
• Your salary is not high enough
• Many lenders will expect you to inject the deposit required to acquire addtional properties from your own respources.

SG27

Depends how much you could let if for? You could get up to £250 a month on £70k in a fixed savings account. Does the rent less all the associated costs, voids and work involved beat this?

For me, unless the rental income was relatively high, I would sell the house take the guaranteed savings interest and add to with your own savings with a view to buy a decent house mortgage free in a few years.