Buy a house for student Son?

SarahB16

https://forums.moneysavingexpert.com/discussion/comment/82050157#Comment_82050157

My apologies, the property is in her name not yours.

My concern was that she may not end up living in the city where she is studying. Graduate jobs are very difficult to get at the moment so good to be flexible to live wherever the role is. She may then prefer to move to another city for a job. I suppose then she would decide to either sell her home or rent it out.

Flats are notoriously difficult to sell so wouldn't want to move to a different city for work and be left with a flat that you can't sell. If it's a house then fair enough sell it and very likely have some equity built up even if she does decide to work in a different place.

In my opinion better to rent when a student and then have the freedom to work wherever you wish when you graduate and not feel shackled to a house/flat/city where you studied but I appreciate some people see rent as 'dead money'.

In your case sounds like you got a bargain.

artyboy

https://forums.moneysavingexpert.com/discussion/comment/82050165#Comment_82050165

It made sense to do this for other reasons too, as she has her non-student OH with her. As things currently stand, it's unlikely she would want to remain there after graduating, but that's a while off and things can obviously change.

Even so, the property market for that sort of flat is currently quite buoyant - it's a university town that attracts a lot of wealthy overseas students that have parents happy to buy for them - we were in fierce competition for a couple of other places before we got this one, and it was the fact that we had the money sitting in an English bank account that got us over the line with the vendor!

So I think her selling it would be the most likely option - could make a decent return on rental, but not sure now is the time to go into being a small landlord!

artyclarty

https://forums.moneysavingexpert.com/discussion/comment/82049860#Comment_82049860

Did exactly this, but a little more expensive than £4k though! Had a nice 2 bed terrace and a friend as a lodger just off Newland Ave. Sold it on to one of the big student letting agent companies and made a tiny bit of money after fees.

I had the cash to buy myself after a lucky windfall and there were no FTB perks back then to think about. I made sure to buy in an area that I could sell easily to either an owner occupier or a landlord investor type. Did nothing to the property, reused most of the furniture that was there and the rest came from charity shops, skips etc!

If it was now, I'd probably not do it as regulations have tightened around landlords and income. I think the FTB perks would certainly be more valuable down the road.

jennifernil

I think it would depend on the location, the duration of the degree, and local job possibilities.

We bought for our daughter, in her name, with a guarantor mortgage, in the West End of Glasgow back in 2003, no FTB perks then. Most degrees in Scotland are 4 year courses, then she went on to spend another 3-4 years doing a PhD, before securing a well paid job, in Glasgow.

It was a 2/3 bedroom flat (1 double and 2 singles), modern, compact, well insulated, and very close to the Uni. She had friends as lodgers in the double bedroom for the first 4 years. In all she stayed there 10 years, moved to a much bigger place a bit further out and rented out the flat for another 11 years before selling up when those tenants left. Flat sold within 3 weeks for a decent price, and the profit + equity paid off a part of the huge mortgage on their current home, bought 8 years back, she says they are never moving again.

So not your typical student scenario.

Our son bought a flat last year for his son, in Stirling, where he has now completed 2 years at Uni. Flat is in the lad’s name, son had the cash in the bank, interest rates were low. Decent student bedsit or studio is £12k per year to rent, so the numbers work, plus the lad prefers not to share. No idea whether he will stay on there once he graduates, depends on the job he gets, he is studying computing stuff, like his Dad and his Aunt.

The flat was rented out previously, is well placed for the Uni, so there is a demand in the area should he decide to keep it but move elsewhere. He is enjoying his independence and rarely comes home now.