In learning about buy to let property, my eyes have been opened, big time!
When I was at medical school, there was a minority of students whose rich parents had bought a house which they then shared with their mates.
I just thought it was an odd arrangement, I think – can’t quite remember my thought processes in those days. I certainly didn’t think “Wow, what a wonderful investment opportunity, I must persuade Dad to invest here at all costs!”.
That’s what I think now.
I will certainly be investing in buy to lets where my kids go to university when it gets to that stage of our lives. I will set up a strategy long before then, for the benefit of the many doctors who have approached me with an interest in this area. While it is true that our kids are young and impressionable at 17 to 19, I think that it will help them to mature in their attitude to money if they are encouraged and given responsibility.
So this is the plan.
We buy “buy to let” flat or house in university town (but less than 6 beds or it becomes an HMO (house with multiple occupancy), to which different rules apply).
Buying price at least 15% below market value (possibly much more in current climate)
We get a buy to let mortgage – may need to put down more than the usual 15% deposit in current mortgage unrest.
We arrange all the refurbishment necessary, do all the necessary gas, fire etc checks, and have it ready to go.
We teach our kid the basics of managing a property. Make him/ her realise that this is a job, for which he will be paid.
Our uni student administers the property, including collecting the rent (easy nowadays with standing orders). Rent goes up every year despite it being his mates – it has to. If he wrecks it at a party, he & his friends have to forego the deposit as for anyone. He soon learns…(and after all, would it be any different if it was other students that we didn’t know living in it?). In fact experience of colleagues tells us that this rarely happens.
We may or may not need a letting agent – it is possible that the student will be able to let the rooms out by advertising in the university.
In fact, I am planning to set this up for the Financial Freedom for Doctors Site as a system that can work anywhere, passively….
Who knows, you may decide to invest in more properties in the same street for your son or daughter to administer. It will give him or her a great insight into the business world, which will be useful for the future. Not to mention that property portfolio!
Here’s to a financially free future!
Alison
Financial Freedom for Doctors can help you to work out how soon you can be financially free, enabling you to work part time, take better holidays or plan for an earlier retirement. Find financial freedom through property investment, the stock market and the internet.
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