How good/bad is this plan?

westernpromise

foxy-stoat wrote: »

Try sticking £50K in premium bonds while you wait - you may get a few nice wins !

Martin says otherwise.
https://www.telegraph.co.uk/investing/bonds/martin-lewis-this-is-why-you-should-dump-premium-bonds/

bluefukurou

robatwork wrote: »

You haven't really mentioned your pension - at your age you should be thinking about retirement as it's about 25 or fewer years away.

Part of your pension strategy could be BTL or equally could be some higher risk investments if you want to gamble, which a student let would be. If you are buying a house for yourself anyway, do you want to risk your entire "pension" on house prices? Surely better to spread risk by having property, shares and cash.

You'll get better guidance about this on the pensions forum.

I have no pension and am only just currently organising getting my NI contributions up to date after many years working in various countries around the world. I see my current job as my ticket to catch up from years of failing to think about pensions and retirement income. I do think if I can do another 3 years in my current job, I'll be able to have a mortgage free property bringing in a rental income, as well as money invested in shares.

Bearing in mind that my student house plan appears unpopular and to some to be unnecessarily risky, I suppose the question I should be asking is what would you do in my position? I've never had money before, so suddenly to have a lot of it is quite a scary feeling. I don't want to be one of those people that invests in the wrong area and ends up being told 'if only you'd put the money in so and so'.

Should I avoid BTL altogether and just buy shares? Start a private pension and throw a ton of money at that? Choices, choices.

brentcloning

westernpromise wrote: »

Remember that if you own anything you are hated by all political parties, we are closer than ever in history to having a Marxist PM, and that as a property owner you are very easily robbed. The regulatory exposures of BTL are currently huge. What if Corbyn gets in and decides to levy a 50% tax on rents? Or a wealth tax on houses worth more than those owned by Labour voters? Or decides that to charge £10,000 a year for an HMO licence? Or 20% stamp duty if you buy or sell a rental property?

Why not just put your cash into dollar denominated shares? That way you'd be speculating on the dollar-pound rate, which is no different to speculating in the price of student accommodation in Sheffield but a lot less work.

Sorry to derail the thread, but please try and not believe everything the Daily Mail tells you. Not everyone left of centre automatically becomes a Marxist.

need_an_answer

I wouldn't necessarily avoid the BTL option but I would urge you to know your target market which may or may not be the student one.
Personally I prefer the BTL to shares simply because I lived through and lost a lot in the last crash.


In terms of BTL I find not having to deal with HMO a blessing which is one other reason I don't do student. I mainly have professional and young families in all my properties and I think the key is not trying to mix too much the style of BTL that you go for.


You will find it difficult buying into the student market and then trying to fit a family or different demographic into that property if one year it doesn't rent and my albeit limited knowledge of the student market tells me if its not rented by September in that academic year its unlikely to be rented until the next academic year hence long voids.

Doozergirl

bluefukurou wrote: »

I have no pension and am only just currently organising getting my NI contributions up to date after many years working in various countries around the world. I see my current job as my ticket to catch up from years of failing to think about pensions and retirement income. I do think if I can do another 3 years in my current job, I'll be able to have a mortgage free property bringing in a rental income, as well as money invested in shares.

Bearing in mind that my student house plan appears unpopular and to some to be unnecessarily risky, I suppose the question I should be asking is what would you do in my position? I've never had money before, so suddenly to have a lot of it is quite a scary feeling. I don't want to be one of those people that invests in the wrong area and ends up being told 'if only you'd put the money in so and so'.

Should I avoid BTL altogether and just buy shares? Start a private pension and throw a ton of money at that? Choices, choices.

Ah, you'll always have moments of wondering why you didn't put money somewhere else. We all see with perfect hindsight.

cloo

I'm not sure I'd bet on students. As people have said, lots of purpose-built housing going up, and some areas may not sustain student numbers and end up oversupplied with housing for them.


If anything I'd go for standard letting - if you're not planning to use the property of release the money soon, you could offer a long contract and have one lot of people in there all year round for longer.


It is getting harder to make money from either way, without question, but if you're in it for the longhaul it may be worthwhile to rent to families/professionals. (I'd go for the former for reliability though)

bluefukurou

westernpromise wrote: »

Pretty much, although you're probably paid in a dollar-linked currency and the dollar is, I think, always going to be a more reliable place to put money than pounds or euros or whatever.

There are broadly two aspects to any investment, the income and the capital growth. With low-end residential letting the income is uncertain because you will get voids and defaulters, and the income and capital growth alike are at risk from all parties' increasing hostility towards property owners. It's not just landlords, either - look at the obscene levels of stamp duty that are now charged. To buy my London flat in 1999 cost £2,500 in stamp duty; for someone to buy today at its current value it would be north of £40,000. The net effect is that property prices are now on the slide in many regions.

You don't really need income because you're earning well, but you do need capital growth and realising this from property is only going to get harder.

Thankfully stamp duty is something I don't have to worry about, and I'm from up north, so the Premier League prices associated with London housing as well.

bluefukurou

cloo wrote: »

I'm not sure I'd bet on students. As people have said, lots of purpose-built housing going up, and some areas may not sustain student numbers and end up oversupplied with housing for them.


If anything I'd go for standard letting - if you're not planning to use the property of release the money soon, you could offer a long contract and have one lot of people in there all year round for longer.


It is getting harder to make money from either way, without question, but if you're in it for the longhaul it may be worthwhile to rent to families/professionals. (I'd go for the former for reliability though)

Something along the lines of this?

http://www.rightmove.co.uk/property-for-sale/property-53340729.html

Hillwalker11

My son lives in China and two years ago purchased a BTL in Manchester. We have POA for him as it makes it easier for the managing agents to contact us in the first instance.One thing you might find is your mortgage lender will not allow you to rent to students. In my son's case there was the stipulation as to no students, no DSS and something else that I can't remember. He therefore lets to professionals only. As we live in the South and the property is in the north he had to employ a managing agent for everybody's peace of mind. He doesn't make a fortune but his mortgage is covered which was his main criteria. As an ex pat if you want to buy in England you have very little options apart from BTL and there is a lot of hoop jumping regarding brokers and mortgage lenders. He is with Skipton who specalise in ex pat mortgages and proved very helpful.

bluefukurou

Hillwalker11 wrote: »

My son lives in China and two years ago purchased a BTL in Manchester. We have POA for him as it makes it easier for the managing agents to contact us in the first instance.One thing you might find is your mortgage lender will not allow you to rent to students. In my son's case there was the stipulation as to no students, no DSS and something else that I can't remember. He therefore lets to professionals only. As we live in the South and the property is in the north he had to employ a managing agent for everybody's peace of mind. He doesn't make a fortune but his mortgage is covered which was his main criteria. As an ex pat if you want to buy in England you have very little options apart from BTL and there is a lot of hoop jumping regarding brokers and mortgage lenders. He is with Skipton who specalise in ex pat mortgages and proved very helpful.

I've been in contact with a mortgage broker that said my overseas status is no problem because of my income and deposit, but after starting this thread and reading some of the comments about student housing, I'm feeling like I may end up going for a smaller property and just buying in cash to avoid any of the issues you mention.