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Uni student graduating with £130k

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I am 24 and still live with my parents. I'll be graduating from uni in 1 year 3 months. I earn about £1000 a month take home running a video editing business and I have a girlfriend of 4 years.

When I graduate, I'll have about £120k from savings and inheritance. I want to move out as soon as I graduate. Assuming I get a normal graduate job earning £22k a year (I live in the North), I am planning on putting down a 20% deposit (£28k) on a £140k house and getting a mortgage and living there with my girlfriend (she is still studying so wouldn't be able to pay much towards the mortgage or bills at least for the next 3 years). That would be OUR house.

With £70k I would buy a house near the university and rent it out for a monthly income. £10k would go towards renovation. That would be MY house. I'd have £5k in cash as an emergency buffer, and £10k I'd keep invested in stocks and shares.

How does that sound? I don't want to put £100k+ into a house that me and my girlfriend will live in because it wouldn't feel like our house, it would feel like my house if I paid for it all. Also I don't know what the legalities are if we broke up.

Go ahead, rip my plan apart :D

Comments

  • copperclock
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    I might be wrong, but I wouldn't be surprised if your GF had no legal entitlement to either of your properties given that she isn't contributing and that you are not married.
  • TightMike
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    I might be wrong, but I wouldn't be surprised if your GF had no legal entitlement to either of your properties given that she isn't contributing and that you are not married.

    Yeah I thought that too. My friend who has 5 or 6 houses was saying as long as she doesn't pay towards the bills/mortgage then she isn't entitled, but as soon as she starts contributing, she is entitled to some of the value. How much though, I don't know. It's not really a pleasant topic to talk about because we're really happy together and I can't see us breaking up, but I'd like to know where I stand IF we did.
  • Perfect2
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    TightMike wrote: »
    Yeah I thought that too. My friend who has 5 or 6 houses was saying as long as she doesn't pay towards the bills/mortgage then she isn't entitled, but as soon as she starts contributing, she is entitled to some of the value. How much though, I don't know. It's not really a pleasant topic to talk about because we're really happy together and I can't see us breaking up, but I'd like to know where I stand IF we did.

    Why would she be entitled to anything if she started contributing to towards the bills, or even if she paid you rent?

    This shouldn't be a difficult subject IMO as at the end of the day no one can expect to live for free and should expect to pay their way. If they are then you might want to consider whether this is the right relationship for you.

    As for whether she is entitled to anything should you spilt up you are not married, her name is not on the mortgage and she not contributed to the deposit so what would she be entitled to?
  • steampowered
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    I agree that it is a good idea to avoid putting all of your money into your home. Mortgages are currently available at very low interest rates, and your girlfriend should probably pay towards the mortgage when she is earning.

    However this does not necessarily mean you should invest the remaining £100k into a buy-to-let. You need to research it properly to make sure you are able to meet the legal responsibilities of being a landlord and understand what you are getting yourself into. There are some great guides on the forum.

    Investing the £100k into stocks and shares is also a good option, putting as much of it into an ISA as possible.

    If you do not feel knowledgeable about investments, could it be worth a chat with an IFA?
  • Voyager2002
    Voyager2002 Posts: 15,346 Forumite
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    First big problem: the job that you really want might be in a different area.

    Second big problem: once your girlfriend graduates she might need to move somewhere else to pursue her career.

    So I think you need to keep some flexibility at this stage... by all means buy a property, but make sure that it would be suitable to be a BTL student house in the future. That way, once she graduates and starts earning you could both move somewhere else and both contribute to buying a house that would be your joint home.

    Do be aware that house prices have stopped growing: some commentators believe that they have peaked. So it would not be wise to buy more than one property at this stage.
  • Voyager2002
    Voyager2002 Posts: 15,346 Forumite
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    And have you investigated help-to-buy ISAs? When you buy your first property, the government will give you an amount equal to 25 per cent of whatever you have saved in one. So if you jump into home ownership now you miss out on a fair chunk of free money.
  • TightMike
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    I agree that it is a good idea to avoid putting all of your money into your home. Mortgages are currently available at very low interest rates, and your girlfriend should probably pay towards the mortgage when she is earning.

    However this does not necessarily mean you should invest the remaining £100k into a buy-to-let. You need to research it properly to make sure you are able to meet the legal responsibilities of being a landlord and understand what you are getting yourself into. There are some great guides on the forum.

    Investing the £100k into stocks and shares is also a good option, putting as much of it into an ISA as possible.

    If you do not feel knowledgeable about investments, could it be worth a chat with an IFA?

    Yeah I agree with you, I am in the process of researching - I still have 1.5 years to make my mind up. I would like to invest in a buy-to-let with most of the money, but I'd still leave some in a stocks and shares ISA to somewhat diversify. I would like an income though and I'd much rather buy something physical rather than just watching numbers on a screen, which is why I'm edging towards BTL.
    First big problem: the job that you really want might be in a different area.

    Second big problem: once your girlfriend graduates she might need to move somewhere else to pursue her career.

    So I think you need to keep some flexibility at this stage... by all means buy a property, but make sure that it would be suitable to be a BTL student house in the future. That way, once she graduates and starts earning you could both move somewhere else and both contribute to buying a house that would be your joint home.

    Do be aware that house prices have stopped growing: some commentators believe that they have peaked. So it would not be wise to buy more than one property at this stage.

    Thanks for the feedback. My plan is to get a mortgage first on a house that I will live in. I will buy a second house outright and rent it out to students. The first house I buy will be a cheapish £130k and I would only intend on living in it for 5 years or so. By that time (I hope) we'd both be on decent wages so we'd get a bigger house in a better area to start a family.

    And have you investigated help-to-buy ISAs? When you buy your first property, the government will give you an amount equal to 25 per cent of whatever you have saved in one. So if you jump into home ownership now you miss out on a fair chunk of free money.

    I have a HTB ISA that I opened in Dec 2015 and am planning on switching to a Lifetime ISA in April.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    Do be aware that house prices have stopped growing: some commentators believe that they have peaked.

    Even top of the market condos on Manhattan, or so I read today. Maybe we are close to a turning point. Maybe the OP will turn out to be lucky that he won't be buying for 15 months.
    Free the dunston one next time too.
  • elephantrosie
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    i have seen many couples who have gone down the road of buying property together and break up later. some stay together just because of the mortgage.

    my advice is always buy within your limit and under your own name.

    some of the others have mentioned that your GF will be legally entitled to some percentage of the property should she contributes to mortgage. this is correct. she does not need to have her name down on the ownership paper or mortgage to own it legally.

    i am against joint ownership property, not even with my spouse. this is just me. everyone is different.
    Another night of thankfulness.
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