Accelerated Mortgages - Buy to let - How much cash do I need?

Special Offers!

Feb 08 - HMO's and Student Property

Enjoys better Gross yields than most

Children at Uni?
This is a good deal!

Your children are paying rent at Uni?? – Why?

A prime niche sector for landlords is the student market. It is buoyant, set to continue its growth and is ripe for innovative approaches. What astonishes us are the number of intelligent, working parents who are happy to see their offspring pay rent for 3 or 4 years, when they could buy a property at their chosen Uni Town. Extracting equity from your current home and investing it wisely, takes a little effort – but is an essential consideration for all parents!!

At the very least, it should “break even” i.e. they would not pay any rent. What actually happens to most however is that the investment goes a long way to eliminating any student debt instead of the average £14,000 per student in the Press Reports!
Example –

Buy a standard 3 bed house at a suitable location for your offspring’s Uni – say £200,000. Put down 15% = £30,000 (can usually be raised easily from your Main Residence if you do not have the cash)

Take out a mortgage of £170,000 for the balance. Fit it out for 4 (possibly 5) students – hopefully friends or colleagues of theirs

Rent it our for the market rent – say 80 per week (does vary from area to area – but for 44 weeks is say £3,520 per annum – income from 3 rooms =£10,560; Income from 4 rooms - £14,080

Costs per month – say on all the finance of £200K +10K expenses =£210,000 at 6.24% is £13,300

The chances are therefore that you may well “break even” or make a small profit from each year that 3 or 4+ your son/daughter is there.

Lets say the property market goes up by a very modest 5%. The £200,000 property will then be worth over £230,000 in 3 years time. It could be worth a great deal more! Even with a CGT charge, enough to wipe out the student debt! You may decide to keep it on for say 10 years for maximum CGT mitigation

Think about it and talk to us if you would like some help!

Accelerated Mortgages is authorised and regulated by the Financial Services Authority (FSA)

Your home and indeed your investment property may be repossessed if you do not keep up payments on your mortgage or any other loan taken out on it.

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