Buying daughters flat and renting it
Discussion
Background.. early retired excellent DB pensions covering all bills and holidays. Likewise a couple of DC pensions in drawdown, SP's to come so no money issues.
The flat's in a high demand rental area, close to the beach/ hospital /town centre, value £200k -£210k , 2 bed - 2 bath totally uptogether,.rental value £1500 a month but they're not selling that well due to currenty uncertainties that's hitting the first time buyer market and just people reluctant to buy flats at the moment, hence people renting.
We have the money (and more) in cash and invested in mainly VLS60. It's just pocket money, a comfort blanket.
I'm not looking at the purchase as investment opportunity itself, other than providing an additional monthly income that may in some ways roughly match our 60/40 investment income- or may not plus it would get the daughter out of a hole in relation to moving on.
As this thought only hit my head today (plus my daughters found a new build she basically move straight into and up the ladder ) any pitfalls ? Obviously agency fees etc, the missus is a non earner (retired) so probably best in her name.
Too much hassle?
The flat's in a high demand rental area, close to the beach/ hospital /town centre, value £200k -£210k , 2 bed - 2 bath totally uptogether,.rental value £1500 a month but they're not selling that well due to currenty uncertainties that's hitting the first time buyer market and just people reluctant to buy flats at the moment, hence people renting.
We have the money (and more) in cash and invested in mainly VLS60. It's just pocket money, a comfort blanket.
I'm not looking at the purchase as investment opportunity itself, other than providing an additional monthly income that may in some ways roughly match our 60/40 investment income- or may not plus it would get the daughter out of a hole in relation to moving on.
As this thought only hit my head today (plus my daughters found a new build she basically move straight into and up the ladder ) any pitfalls ? Obviously agency fees etc, the missus is a non earner (retired) so probably best in her name.
Too much hassle?
Wit all the regulation changes I'd not be touching BTL now, the return is not worth the effort, but I appreciate the desire to help your daughter.
Have you looked at part exchange options (most big householders will offer) - may take a £ hit but it'll be painless (maybe less than you'd expect as they're really trying to maintain volume given current market conditions).
Have you looked at part exchange options (most big householders will offer) - may take a £ hit but it'll be painless (maybe less than you'd expect as they're really trying to maintain volume given current market conditions).
kiethton said:
Wit all the regulation changes I'd not be touching BTL now, the return is not worth the effort, but I appreciate the desire to help your daughter.
Have you looked at part exchange options (most big householders will offer) - may take a £ hit but it'll be painless (maybe less than you'd expect as they're really trying to maintain volume given current market conditions).
Cheers. I popped into the developer today and they've pulled part ex's for flats due to griefs with leaseholds. This is mainly down to 'Landlord certificates' introduced in 2022, she has that sorted but it was quite griefy !Have you looked at part exchange options (most big householders will offer) - may take a £ hit but it'll be painless (maybe less than you'd expect as they're really trying to maintain volume given current market conditions).
Head kind of says no on the whole thing but an excellent deal has come up for her, as you say due to market conditions. We're not massivley concerned over income but if BTL is a royal pain in the arris we could happily avoid.
When I gave my 3 children funds towards their house purchase funds ,one was already living in a house which I had provided the deposit for some years earlier.
His “ new “chain then ran into issues and I thought about buying his old house to help but decided the hassle just wouldn’t be worth it.
He agreed and put a little bit more into the deal which I matched to get it across the line.
His “ new “chain then ran into issues and I thought about buying his old house to help but decided the hassle just wouldn’t be worth it.
He agreed and put a little bit more into the deal which I matched to get it across the line.
I would buy it, then lease to the local council, many councils operate private sector leasing schemes, e.g. > https://www.solihullcommunityhousing.org.uk/images...
Downsides:
Below current market rate
No control on tenant selection
Property condition at hand back may require extensive refurb
Upsides:
Guaranteed income, with no void periods
Managed by 3rd party
No RRA shenanigans
Downsides:
Below current market rate
No control on tenant selection
Property condition at hand back may require extensive refurb
Upsides:
Guaranteed income, with no void periods
Managed by 3rd party
No RRA shenanigans
DT1975 said:
The flat's in a high demand rental area, close to the beach/ hospital /town centre, value £200k -£210k , 2 bed - 2 bath totally uptogether,.rental value £1500 a month but they're not selling that well due to currenty uncertainties that's hitting the first time buyer market and just people reluctant to buy flats at the moment, hence people renting.
You'll be paying £11,500 stamp duty if it's a second home for you so you'd be better off getting your daughter to knock £12k off the asking price and giving her the cash...As a single BTL when you're financially secure and don't really need the rental money, I'd say the juice is not worth the squeeze. You're between a rock and a hard place with your daughter wanting it sold to move up.
I'm retired and have a BTL (bought it originally for my daughter when she was at university so save on her (my) accommdation fees), when the tenant gives notice I can't wait to sell it. And whilst I don't need the money from it, it's a potential hassle I can do without.
Whilst being a landlord of mulitple properties within a limited company can make sense, with the upcoming changes there's potential for a lot of hassle as a accidental/hobby landlord. I retired for a reason.
Good call on the second home stamp duty to be aware of!
I'm retired and have a BTL (bought it originally for my daughter when she was at university so save on her (my) accommdation fees), when the tenant gives notice I can't wait to sell it. And whilst I don't need the money from it, it's a potential hassle I can do without.
Whilst being a landlord of mulitple properties within a limited company can make sense, with the upcoming changes there's potential for a lot of hassle as a accidental/hobby landlord. I retired for a reason.
Good call on the second home stamp duty to be aware of!
Panamax said:
DT1975 said:
Too much hassle?
Yup, drop the price far enough to guarantee an early sale and lend/give your daughter cash to help her move forward. Appreciate that it's not always as simple as that due to the asset / gifting of cash explanation but a good mortgage broker (Sarnie!) will get you around that no problem.
Remember that if she's buying before selling she'll have to pay the second home owner stamp duty but can then reclaim it if selling with 3 years (I think that's still the timeframe but would be worth doing more than my cursory Google check!).
Regbuser said:
I would buy it, then lease to the local council, many councils operate private sector leasing schemes, e.g. > https://www.solihullcommunityhousing.org.uk/images...
Downsides:
Below current market rate
No control on tenant selection
Property condition at hand back may require extensive refurb
Upsides:
Guaranteed income, with no void periods
Managed by 3rd party
No RRA shenanigans
When I’ve looked into this they guarantee to hand the property back in the condition they took it on so that could be one less downside. Downsides:
Below current market rate
No control on tenant selection
Property condition at hand back may require extensive refurb
Upsides:
Guaranteed income, with no void periods
Managed by 3rd party
No RRA shenanigans
They are also happy to take a long lease 5 years plus which could be a big positive for the OP. Literally nothing to worry about for 5 years just sit back and spend the money.
I would say that the number of landlords that are selling their properties ahead of the change on 1 May which makes it much much harder to get rid of a tenant gives a pretty good indication as to the potential pitfalls.
Combined with it being a leasehold flat, I would not be wanting to buy the property.
As others have said, giving/lending your daughter the money pending a sale would be a better option notwithstanding the stamp duty implications for her in the short term.
Combined with it being a leasehold flat, I would not be wanting to buy the property.
As others have said, giving/lending your daughter the money pending a sale would be a better option notwithstanding the stamp duty implications for her in the short term.
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