Buying house to rent out but keep a room?

josh1924

Hi guys,

As you can tell from the title this is a bit of an obscure question. Basically I am a recent graduate with quite a large amount of savings. My plan for a while has been to buy a property to rent out as soon as possible. The only issue is due to demands of a new job I may be required to commute long distance.

Is it possible to buy a house, rent it out but also keep a room for me to live in during the week? Are there contracts like this that exist? It would kind of be like me renting a room in my own house lol.

Thanks

Kynthia

Would this be your primary residence?


If yes then you would be renting rooms in your home and they would be lodgers.


If no then you would be renting out rooms to tenants, rather than the whole property excluding one room which you can't really do as you don't have the right to access the property to get to that room whenever you want. So as you would be renting out rooms on separate contracts the communal areas would be shared by all and accessible by you. However the property might become a licensable HMO and you may need to handle the bills and Council Tax. Also Tenants have more rights than lodgers. So as long as you are aware of the different responsibilities it should be fine.

josh1924

Kynthia wrote: »

Would this be your primary residence?


If yes then you would be renting rooms in your home and they would be lodgers.


If no then you would be renting out rooms to tenants, rather than the whole property excluding one room which you can't really do as you don't have the right to access the property to get to that room whenever you want. So as you would be renting out rooms on separate contracts the communal areas would be shared by all and accessible by you. However the property might become a licensable HMO and you may need to handle the bills and Council Tax. Also Tenants have more rights than lodgers. So as long as you are aware of the different responsibilities it should be fine.

It wouldn't be my primary residence. It's just so annoying it has to come down to this.

So the only option would be to rent it out as multiple occupancy?

Thanks

G_M

What are you trying to achieve?

If this is not your primary residence, what is the purpose of the room?

Is it that you have friends/family in the area and want to come back occassionally to stay and visit them? If so, stay with your friends/family!

Is it somewhere to store your stuff? You could rent out the house and explicitly exclude that room, and keep it locked as a store room - but your access would be limited and depend on the tenants.

Is it so they would be lodgers and hence have fewer rights? You are trying to manipulate the legal system and will probably fail.

PheoUK

Is this an investment or not?

josh1924

Thanks for the responses everyone.

Sorry if I wasn't clear in the OP. Basically I need to commute from where I currently live. As it's a long distance I need to stay over somewhere 4 nights a week.

I have been saving for a long time to make an investment in a buy to let property. If I start paying someone else money for me to stay somewhere during the week then I am going to be giving away a lot more money than planned.

As a result the best option I can come up with is by combining the two parts together. Buy a house there, rent it out somehow but also use it as a permanent base in the week. It would still give me the investment I'm looking for, security and more control. Obviously this wouldn't be a buy to let mortgage though as you can't live in the house yourself!

Does that make sense?

Thanks

Cat2011

Make the property you buy your main residence with a residential mortgage. Rent the rooms out to lodgers. Go "home" to visit the family/whoever every weekend.

booksurr

it will be a house in multiple occupation. You would have to let each bedroom individually and obviously one of those rooms would be yours. All the communal areas are then accessible to everyone

- as an HMO you are liable for the council tax and you will need to think how to handle utility bills (you pay or you all share)

- you will need to check with the council what are their rules regarding licensing of HMOP in their area, it varies, some requires licences for HMO of as little as 3 households (in verysimple terms 3 bedrooms)

- your market will obviously be niche and restricted to those people prepared to share with strangers. You will likely have a high turnover of tenants and will need to consider your attitude to prospective tenants on benefits, especially as your set up will likely appeal to those who are only entitled to the shared house rate of benefit.

G_M

josh1924 wrote: »

Thanks for the responses everyone.

Sorry if I wasn't clear in the OP. Basically I need to commute from where I currently live. As it's a long distance I need to stay over somewhere 4 nights a week.

I have been saving for a long time to make an investment in a buy to let property. If I start paying someone else money for me to stay somewhere during the week then I am going to be giving away a lot more money than planned.

As a result the best option I can come up with is by combining the two parts together. Buy a house there, rent it out somehow but also use it as a permanent base in the week. It would still give me the investment I'm looking for, security and more control. Obviously this wouldn't be a buy to let mortgage though as you can't live in the house yourself!

Does that make sense?

Thanks

To help you we need to fully understand your position.

Where do you 'live' at present (the place from which you are commuting?
* a rented home?
* a home you own?
* with a mortgage/without a mortgage?
* your parents?
* you partner's home
* something else?

josh1924

Cat2011 wrote: »

Make the property you buy your main residence with a residential mortgage. Rent the rooms out to lodgers. Go "home" to visit the family/whoever every weekend.

I think this is the option I am looking at, I can't see any other way really. That's why I'm thankful to you guys for the advice My main worry is: 1. Will it work? and 2. Is it going to be worthwhile?

booksurr wrote: »

it will be a house in multiple occupation. You would have to let each bedroom individually and obviously one of those rooms would be yours. All the communal areas are then accessible to everyone

- as an HMO you are liable for the council tax and you will need to think how to handle utility bills (you pay or you all share)

- you will need to check with the council what are their rules regarding licensing of HMOP in their area, it varies, some requires licences for HMO of as little as 3 households (in verysimple terms 3 bedrooms)

- your market will obviously be niche and restricted to those people prepared to share with strangers. You will likely have a high turnover of tenants and will need to consider your attitude to prospective tenants on benefits, especially as your set up will likely appeal to those who are only entitled to the shared house rate of benefit.

This definitely worries me. Would letting agents handle this form of rental? Or is that only for house rental.

G_M wrote: »

To help you we need to fully understand your position.

Where do you 'live' at present (the place from which you are commuting?
* a rented home?
* a home you own?
* with a mortgage/without a mortgage?
* your parents?
* you partner's home
* something else?

At present I am living with parents and that's how I am looking to stay for a couple more years. I imagine some people will say just move etc, but in terms of investments and the like I think what I am asking might be a better choice?

Thanks again everyone I really appreciate it!

BitterAndTwisted

If you're going to stay in the property during the week and visit your family at the weekends, then the purchased property will be your primary residence and you'll be taking in a couple of lodgers. This will not interfere with the terms of a residential mortgage and won't give your lodgers exclusive occupation, and consequently they will not become tenants. Also, the tax rules allow you to earn £4250 per annum tax-free. Anything over than and you'll need to declare it for tax-purposes. Meanwhile, you are totally responsible for paying the Council Tax and utility bills.

You should explain to any prospective lodgers that you "often" go back to your home-town at the weekends to visit family, not that you always do. Then, they won't confuse their position as lodgers with those of tenants, and you shouldn't fall foul of HMO regs.