>save up $10,000
>put down deposit on house
>immediately rent out to college students
>collect $2,000 a month in rent
>mortgage pays for itself + over $1000 profit per month
>wait a year
>saved another $10,000
>repeat
>after 8 years you're earning $100,000 for doing absolutely nothing
Why doesn't everyone do this?
Nice, have you done this yourself already OP or just speculating?
Your numbers are a bit better than could be expexted in reality. For starters you have to pay property tax, insurance, you won't have renters during the spring and summer.
This and your mortgage and everything else will eat up nearly everything you'd make from rent revenue. Additionally, banks don't often lend for rentals and if you do manage to get a lender willing to participate, you're looking at 30-40% down minimum required. Owner-occupied properties are treated differently.
>college students
Enjoy your rental getting trashed
I only used dollars because my keyboard doesn't have a pound sign.
In the UK student houses are way less than the house value that property tax kicks in at, so you don't pay property tax at all.
You need insurance yes, but you factor that into the rent.
Bought my first house a year ago today, got a meeting this week about getting a mortgage on a second.
The first one had higher start up costs because the house wasn't really great for students and I had to provide a lot of shit to get people to move into it, but total profit a year to the day is $8,800 (UK pounds).
The second house I'm buying at auction and will do the same thing. So from next month when everything is completed I should be earning 2800 pounds per month in profit from the two houses.
Going to save up another 11,000 and buy a third.
My long term plan is to own 10 student houses yielding 200,000 pounds per year, and I'll never work again.
>save up $10,000
>put down deposit on house
>immediately rent out to college students
>they leave the house in June in July
> -2 months of rent a year
>take the time to fix everything they've ruined in in the house. So basically, everything
> -2months of rent a year
>collect an average $1,500
>mortgage on a $2,000/month house pays for itself with a $10,000 deposit
>lolwut.jpeg
>what are interest rates?
>wait a year, repeat
>after eight years, you're earning $65,000 a year after maintenance expenses.
>You're spending $60K/year in mortgage repayments
>You're now in it for the next 25 years
My current mortgage is 450 a month.
I collect 2000 a month in rent.
That's 1550 a month in profit.
I collect two months rent from everyone as a deposit. If they damage the house I'm getting 4,000 to fix it.
It's not -2 months a year, all of my tenants stay over the summer but in the contract if they move out for the summer they can hold onto the house for half rent in July and August. So yes, I lose one month's rent per year, in the summer, if they move out. But they haven't.
>what are interest rates
I'm afraid you have no idea what you're talking about friend
>Oh the market went up in the past 8 years guess ill take my 50K profit and walk.
Fellow britbong too, this is my plan too. Where is your first house located?
Is the 1k profit per month after tax?
How much do you earn in your current job?
>Bought my first house a year ago today, got a meeting this week about getting a mortgage on a second.
where do you live yourself? in one of the houses or with your parents? or do you rent?
are these both BTL mortgages?
how can you buy a house at auction with a mortgage? this is extremely risky because you have to pay a deposit on the day and pray that your mortgage is approved. right?
thinking of doing the same thing. i bought my first house last year and i am renting out 2 rooms which is paying the mortgage for me. i'm interested in getting a BTL mortgage but im too scared to buy at auction for fear of losing my deposit
In W.Europe it's more like:
>pay 100.000eur deposit on 330.000 house,
>immediately rent out, preferably not to students because they'll fuck your 100k investment up
>collect 1400eur in rent
>pay 1500eur in property tax and 1200eur in secondary housing tax (the latter only if you live in a socialist city shithole like I do)
>mortgage does not pay for itself, but after nine years of dealing with tenants and tax bullshit you have a secondary home
Socialism. Not even once.
Just a warning, the town that I went to school in decided to build a lot of modern student housing and highrises. In fact they built too much, up to the point where they even had trouble filling their own residences.
The result on the renting market was pretty bad and rent rates dropped severely. A lot of people doing what OP did sold their house and got out of the game, and I'm sure some of them sold at a loss.
I'm currently going to move to a new city and it has two universities and a college close to the city center. Student housing is a huge thing obviously and I thought about investing. I have about 20k saved up. However, if there's a push to build student housing like with my old area everyone will be fucked.
OP here. Went out so on phone. Answering a few questions:
Buy in a poor city with a large student population. Newcastle, Liverpool have lowest property values and huge student populations.
Buy houses not apartments. Student housing is unique in that you charge per person not by the value of the property. I have two couples and two singles sharing a four bedroom house paying 350 each per month.
I don't pay tax because I haven't earned more than 10k yet, which is the threshold. When I do better next year I'll have to pay.
I live and work as a teache in Bangkok
do you comply with all the HMO regs? boiler servicing, wiring certificates, room sizes etc.
that shit would really add to my costs. i do all my own wiring and plumbing.
cool, thanks for the insight
Lol unfortunately in the UK it is not as easy as this (or I would be saving up to do it too). George Osborne just brought in changes to the way you pay tax on buy to let earnings and its basically made it impossible to do profitably.
Like, you might scrape £150 per month. And to get a mortgage you need a 25% deposit, so unless your student town is somewhere like hull where property is forever in the toilet, you will take a long time to save up for a deposit.
So basically you are a slumlord. And on top of that, you're an English teacher in SEA. Are you having sex with children as well?
Yeah, this probably wouldn't work.
1) it's going to have to be a pretty nice house to get a college student to pay 2k a month for it
2) if you're only putting 10k down on it, it's going to take a very long time for the for 2k gross a month ( +HOA fees and property taxes, so I'd say that would put you at 1500 a month) to pay off the rest of the mortgage
3) you probably won't have anyone actually in the house during the summer, and I'd say there's a fair chance that college kids will mess up the property
As a general rule for any retarded people, if you have to ask 'why isn't everyone doing this?!', there's a very good and obvious reason why everyone isn't and you're too dumb and naive to see it.
Shit we are doing this Op
Now to find cheap houses near newly opened uni's.. hmm looking....
Question
Where the fuck do you get those prices in a uni city
Rent you can get here in germany is about 7-9% of buying price
Minus housekeeper
granted i still get 20% profit on my investments p.a. with mortage and shit but still
Where are you buying and how many flats are in your houses
Also: is it a good or bad neighborhood
And you forgot the special French add-ons:
>if the tenant doesn't pay... it can take up to THREE YEARS to chase him (where he's using your property for free)
>also the rent is capped by law lol
In Chicago by my university, rents are usually 1 - 1.5k a month, but everyone usually has 2 - 4 oommates, so it comes out to 300-500 a month per student, which is way cheaper than dorming and is really reasonable for having an apartment in Chicago.
The contracts are usually mandatory paying for 1 or 2 years with a safety deposit for damages. So, during the summer, many students stay over the summer or sublease their apartments to summer school students for a few months. If not, they can suck up the 300 - 500 rent for a few months usually.
So, I can see it being viable in the sense that the apartments and houses by my university are dirt cheap in comparison to the dorms (10k per yr or 5k per sem), although I don't know the costs of the mortgage or anything else, but they're always full around campus and that's the average rate that is going for the area.
And generally the students aren't complete dumbasses who always throw parties and destroy everything like what everyone pictures I bet.
>25% deposit
What planet do you live on? I paid 10% on my first house, just 9k.
>slumlord
I own a property and rent it to people who want to rent it. I have to turn people away regularly. When it was first filled with tenants I had four groups of friends fighting over it. I don't see how this makes me a 'slumlord', are you sure you aren't just mad?
Also no, I don't have sex with children, I teach English to middle schoolers. It's not something I plan on doing for the rest of my life but while I'm in my 20s I'd rather do this than work a dead end job. At least doing this I earn good money and it's not as boring as the regular 9-5.
Newcastle, in England. But Liverpool is the best location, I only bought in Newcastle because I have family there so it was more familiar.
You want a poor city (relatively speaking) with a big student population. Easy. Everyone lives in Uni-approved accommodation their first year then moves into a house their second year. You can be that house.
The neighborhoods are pretty poor, but not welfare recipient get shot poor. Places like Newcastle and Liverpool are generally very safe cities with young populations.
My house was 88,000 pounds. I rent it for just under 2,000 a month to a group of six students. It's not flats, it's just a house. They all share the space and have their own rooms (two couples share a room each, two singles have their own room).
This is completely normal for student housing.
The rent is not capped by law, and again, this is student accommodation. They are groups of friends who move in together. If one doesn't pay the group as a whole is fucked, so the rent is much lower. And again, you take two months rent off them as a deposit which is yours if they fuck the place up. People dont want to lose their deposits so they generally make sure everyone is paying their rent.
Also as students receive loans from the government to cover their rent there's really no reason why they wouldn't pay. I haven't had any problems so far, but you're right that non-payment of rent is a risk in any landlord situation.
Not everyone lives in burgerville, where the majority are poor losers who cant afford a 10 cent house.
>Why doesn't everyone do this? (in the UK)
They do. BTL is huge here.
Im in the mortgage industry.
How the fuck do u have a 450$ mortgage on a house thats bringing in 4.5x that. Is it like a interest only 5/1 arm teaser no impounds shit hole that is right next to a uni or something?
Like wtf
he is not being honest
he won't answer questions about this
most likely, he has inherited some/all of this or is loaning it from family or some shit. nobody buys property at auction on a BTL while being based abroad. im not sure it's even legal.
With a years contract UK students do pay for summer. It's rare they go home
No property taxes that I'm aware of