Student buy to let property as an investment.

jimjames

Andypandyboy wrote: »

I don't really understand the difference between the types of mortgages in terms of nuances aside from interest rates. Do they differ substantially in other ways?

I think the main is interest rates, also level of deposit needed may differ but probably much less choice.

buglawton

Andypandyboy wrote: »

That is interesting. We would need a mortgage. We may buy prior to our daughter living there, and rent out to other students first.

Do you have any more info on this relative rule? Thank you for bringing this up.

There are 2 types of mortgage, Residential and Buy To Let. The latter can be easier to obtain as the lender knows you still have somewhere to live if they need to repossess the property on a loan default. Every BTL mortgage I've heard of has strict rules about yourself or relatives living in the property and about any subletting by the tenant. A short phone call to any lender will confirm this. It used to be easier to put student children in your mortgaged BTL in the pre crash days, perhaps that's how Cheri Blair managed it.

Residential mortgages on the other hand will all have a rule saying you can't let it out at all without the lenders permission. People who've lived for some time in their own property then need to let it due personal circumstances would likely get permission. Doing it very soon after starting the mortgage would be frowned upon.

There may be a specialist lender out there to suit the buy-for-student-offspring scenario. You need to seek one out.

Lord_Baltimore

And remember, even if you use a letting agency, you are still the landlord in the legal sense.

For the best financial reward, it is better to manage the property and tenancy yourself but this means becoming au fait with Tenancy Agreements, Deposit Protection, maintenance obligations, gas certificates, HMO Licensing, Council Tax exemption, eviction processes etc.

Becoming a landlord is a serious responsibility; it is a business even if the tenants are known to you. Any slip ups and it can cost you especially if you encounter savvy or destructive tenants. That said, there's no reason why it shouldn't work out. Bear in mind that using an agent they will charge you fees and your tenants fees and they really are unnecessary middlemen. They will manage the property at your expense and will therefore be less diligent about value for money.

Get over to the House Buying, Selling and Renting Board for expert opinion and advice.

jabbahut40

Hi,


I am in a similar position and considering buying a flat in Edinburgh for my daughter next year when she'll be at 2nd year at uni. She wants student halls for the 1st year to make friends.


As a homeowner with no mortgage I was thinking it would be easier to remortgage part of the family home and use the money to buy a flat for a daughter (in her name) and rent out the remaining rooms. Is this is a better option than trying to mortgage on a new flat for rent?


Thanks,


Jabba

buglawton

A remortgage may be possible depending on the usual things like your income, age etc. But the lender will certainly expect the flat to be available as part of your equity in case of financial difficulties, so won't allow the flat to be bought in your daughters name or gifted to her for the duration of the mortgage. Again this looks like a case for a specialist lender.

atypical

There are also "Buy for Uni" mortgages which lend up to 100% LTV with parents acting as guarantors.

http://www.theguardian.com/money/2015/jan/10/mortgage-students-buy-own-homes

Andypandyboy

atypical wrote: »

There are also "Buy for Uni" mortgages which lend up to 100% LTV with parents acting as guarantors.

http://www.theguardian.com/money/2015/jan/10/mortgage-students-buy-own-homes

Thanks, that is really interesting.

buglawton

The Bath Building Society one is currently withdrawn, Aldermore might be your next stop. Let us know what you how you get on.